The price of gold is taking a beating today as investors worldwide are rushing to dump the precious metal. CNBC blames Cypress.
Gold prices continued to plummet Monday on concern that Cyprus will have to sell excess reserves of the precious metal to raise about $522 million to help finance that country’s $13 billion international bailout, Dennis Gartman, editor of The Gartman Letter, told CNBC.
“There are a lot of people throwing up their hands. Throwing positions overboard. Panic is everywhere,” Gartman said in a “Squawk Box” interview on Monday. “I’ve never seen anything like this. I mean it.”
Is this an overreaction?
But Barratt added that he believes this is a “significant overreaction” and offers a good entry point for investors. “For the amount of money that’s going into the system, you have to take a longer-term view that stimulus will support gold prices,” he said. (Read More)
Could this be a sign of worse things to come?
The rapidity of gold’s drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly ‘hurried’ selling in the last five years. In July 2008, gold quickly dropped 21% – seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period… Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming?
Read the whole thing, the charts don’t inspire much confidence in anything.