Gold is often seen as an investment safe haven when the economy falls on hard times. But today it’s down 11 percent, the biggest weekly percentage loss in 18 years. According to Gold and Silver’s Mark O’Byrne: “Bearish sentiment [in the gold market] remains at extreme levels and all notions of fundamental value are being thrown out the window as the financial crisis morphs into a global economic crisis.”
Why is gold dropping? The U.K.’s MarketOracle offers this explanation regarding gold versus comex gold. But I’m more inclined to believe Bruce Dunn, vice president of trading at New Jersey-based Auramet Trading: “All the mining companies are saying gold is going back to $1,000, but I think these people are living in la-la land. You’ve got a serious recession and people are not buying gold jewelry.”
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