Gold dropped below $1,190 an ounce on Wednesday, as extreme volatility of the euro and losses in global equity markets prompted profit taking after rallies to record highs last week. The announcement that Germany will ban naked short selling of Government bonds and equities and naked CDS in government bonds sending the market in to a spin. There remains a significant chance that the measures could garner support/implementation from the larger euro area states. Indeed, according EU Financial Services Commissioner Michelbach, extending the short-selling ban BEYOND Germany was discussed in Brussels yesterday: “Of course, it’s all about sending symbolic headlines to markets right now to flank the rescue package. We’re in touch with European Union partners but we need to get the UK on board. This has to be EU-wide to be effective.”
For USD$ gold: "When we hit all-time highs, everybody thought gold was going to shoot straight up to the moon. Now, a lot of people decide to take their profits, and the big banks just put in sell orders that hit the market," said COMEX gold floor trader Dominick Cognata."I don't think the selling is over yet, I think we still have another $20 on the downside."
The NZD dropped 2 cents last night ( bottom of 0.666) which means in NZD$ terms the price of gold has actually increased slightly ( ~ .3% ) with the currency drop, primarily as investors pulled out of risk based investments ( including Gold ) due to the German Ban.
Here is what the picture looks like in $USD
Here is what the picture looks like in $NZD
