Learn How Monetary Concerns Affect Precious Metal Prices Directly At Precious-Metal.org

February 23, 2010 – Precious metal prices dropped today as concerns over monetary tightening in the United States and volatility in the world currencies continued to dampen investors’ appetite for risk. On the heels of four strong weeks of gains, gold prices dropped $8.60 to $1,105.00, with silver losing 34 cents to $15.87 and platinum slipping $14.00 to $1,513.00 per ounce in late afternoon trading.

According to Bruce Dunn at Auramet, concerns about further money tightening by the Federal Reserve and continued worries about the Greek debt situation were among the items pressuring prices. In addition, profit taking was seen after Commodity Futures Trading Commission data showed that noncommercial net long positions were up 4%, suggesting that some investors were looking for upcoming prices to be lower.

The US dollar has also been instrumental in the day’s decline. “The gold price weakness is mainly induced by the U.S. dollar strength,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland. “Gold is retesting the support level at $1,110 an ounce.” While afternoon trading improved, the early totals for the day looked much bleaker, with gold dropping at one point to $1,100 per ounce.

Today’s sell-off does not look like the trend to most analysts, rather a correction that was motivated by external pressures; prices will likely remain steady as they regain momentum for another rally. For investors, a low point like this offers a good opportunity to make additional purchases, taking advantage of monetary concerns as they affect precious metal prices. 

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Danny Burns

Senior Staff Writer - Precious-Metal.org