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Gold buyers respond swiftly to price breakby Peter A. Grant
Apr 15, AM 
Gold buyers and owners are a resilient bunch. Just when you think they might be knocked for a loop, the phone starts ringing off the hook and the orders stream in. And that's what happened on Friday and thus far today. Over the past several months, a number of clients in the buying mode informed us that they were waiting for a price drop. Now that it has occurred, the "bottom-feeders" are out in force. (Please forgive us if you call and get sent to voice mail. We ask that you leave a message and we will get back to you as soon as possible. We appreciate your patience.) Gold is on the bargain table courtesy, we are told, of institutional selling that started with a major bank selling 400 paper tonnes executed by Merill Lynch on the Comex open Friday. Another paper sale of 100 tonnes came in immediately thereafter. One London trading house reported this morning that a big bank used Merill Lynch to broker the order. Subsequent long liquidations -- panic selling and margin induced liquidations -- sent the price cascading through one support level after another. Gold is trading at $1380 level as this is written and silver at $23.60. Mainstream analysts push mainstream cause and effect for the market action -- everything from reduced future commodity demand in China to Cyprus potential sale of ten tonnes of gold along with a broad range of equally innocuous rationale. There might be a bit more to it than that and we will see what shakes out in the days and weeks to come. When prices drop as much as they have in the past couple of days, buyers generally do not consider the whys and wherefors. The principle interest is that gold is on the bargain table. None of the economic conditions which created their interest in gold have changed, only the price. This opportunity feels very much like the one Gordon Brown and the Bank of England presented the marketplace in 1999 when Britain announced auctioning a major portion of its gold reserves -- an announcement that caught the market similarly off guard but simultaneously presented an attractive buying opportunity. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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