Gold drops drastically as other commodities gain

In the Lead: “Punch-Drunk”

Mr. Plosser then added that: “The Fed may have to change course "sooner than a lot of people expect," and will be sooner than 2014, barring a catastrophe. Right now, I see the economy that is going to be gradually firming. If the performance on employment and the economy continue to improve as we've seen them over the last six months, if they proceed for another six months, I think that would be pretty good cause for thinking maybe we need to ease off on the gas pedal a little bit." ‘Nuff said.

There is in fact a bit of a disconnect present in all of this sentiment and perception-based action that we witnessed yesterday. When one looks at what the Fed Chairman did say, the words he used should have actually emboldened the trading crowd to continue to push gold, silver, oil, etc. to higher ground:

“At present, with the unemployment rate elevated and the inflation outlook subdued, the committee judges that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives.” We have to assume that the absence of the words “for x more years” or “forever” after the word “policy” in the above sentence is what did the “trick” for some players.

The “America/Dollar/System Will Fail Any Minute Now” team was also handed another heavy blow yesterday when on the back of continually improving US economic metrics Mr. Bernanke did not appear to offer more “indefinite” servings from the punchbowl of liquidity that has engendered the mega-rallies in many assets (esp. gold and silver) during the past three years.

MiningWatch Canada alleges that “Some companies dump their mining wastes into the oceans of other countries, even though their home countries have bans or restrictions against it. We found that of the world’s largest mining companies, only one has policies against dumping in rivers and oceans, and none against dumping in lakes.”

Until tomorrow,

Jon Nadler is a Senior Metals Analyst Kitco Metals Inc. North America

Blog: http://www.kitco.com/ind/index.html#nadler

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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