Gold, silver drop sharply in general financial meltdown

Gold, silver drop sharply in general financial meltdown by Michael J Kosares for Gold USA

Gold and silver dropped sharply in overnight and early U.S. trading despite, or possibly because of, the Fed’s launching a $700 billion quantitative easing program and cutting interest rates by another half-point to counter the economic threats posed by the coronavirus.  Gold is trading at $1475 – down $55 on the day. Silver is down $2.10 at $13.53.

The metal has been pushed steadily lower over the past week by the deflationary scare rolling through financial markets even as safe-haven buyers accumulate the metal in physical form to hedge heightened risks in the financial system – a set of circumstances reminiscent of the 2008-2009 market dynamics. That deflationary scare has roiled stock, bond and currency markets across the globe today. Central banks and governments are scrambling to combat a general financial meltdown.

“Gold is being hit again with liquidation as the markets meltdown,” said veteran market analyst Adrian Day in Andrew Sykora’s Kitco column last Friday. “In these market panics, it is a source of liquidity. But once the panic liquidation subsides, even if the broad markets do not recover, gold will resume its role as a hedge and move up.”

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