| Kitco News Interview: www.youtube.com www.thegoldforecast.com Last week's opening letter ended with the old Chinese saying, "May you live in most interesting times." Stockholders and partners of JP Morgan might wince but have to acknowledge that indeed, these are just those kinds of times. Reports surfaced yesterday that a JP Morgan trader, nicknamed "Valdemort," amassed an estimated $2 billion in losses in about two weeks of trading. Known in the industry as a "dynamic hedge," this is a form of hedge play that includes a highly speculative component. This event shows that even the most savvy of traders can be brutalized by global markets. The global equities markets as well as the precious metals continued their descent as they persist in responding to last week's elections in Europe. New leadership in both Greece and France ran on a platform of revamping current austerity measures. The knee-jerk reaction has been a global panic involving massive stock liquidations as well as precious metals liquidations. Gold traded as a risk off investment rather than a safe haven. Through the week as the market sold off, typical "buying the dip" bargain-hunting did not surface. As a result, gold closed at a 4-1 month low. Gold & Silver: On a technical basis gold broke through its long standing support when on Monday of this week it opened at its high of 1639 and never looked up. The first level of support that would be tested was indeed tested in today's trading. 1580, at least for ... |
