Hurricane Sandy Wreaking Havoc on Gold Markets

Monday, 29 October 2012
Written by 
Published in Gold Investing

Hurricane Sandy is currently dominating just about every part of the news, and it is also affecting everything around it. The effects of Hurricane Sandy are being felt in just about every sector; and that includes the gold market. The Hurricane has brought trading to almost a complete halt and will more than likely keep the markets closed until at least Wednesday.

Positive-Pullback

While the yellow metal didn’t drop too badly, as it is still above the $1,700 price mark, the fact of the matter is that no one is going to be trading or buying it for a few days, as all eyes are focused on Hurricane Sandy. December gold was down by $1.50 to come in at $1,710.40 an ounce on the Comex division of the New York Mercantile Exchange. This was the price the yellow metal settled on after a range of $1,709.20-$1,717.80 earlier today. Electronic trading is still open, but with the markets closed things really get more narrow on the trading market for gold and all other precious metals.

“We don’t expect much with many New York based traders staying home, the floor of Comex closed, and the NYSE also closed,” said TD Securities in a research note.

The effects of Hurricane Sandy are so deep that even Barack Obama and Mitt Romney have cancelled campaign trips for the next several days.

Of course, while Hurricane Sandy is the driving force behind the market shutdown and slow trading of gold, there are other factors still in play that are causing the yellow metal to drop some.

Most U.S. markets are once again focused on Europe, where the euro-working group is due to meet Monday to discuss Greece’s request for a two-year extension for the implementation of austerity measures. It seems like the IMF (International Monetary Fun) wants to reduce Greece’s debt right away and Germany is not on board with this at all. TDS (TD Securities) said it best with the following quote:

“Some reports suggest that there is a division on how best to address the issues between the IMF (International Monetary Fund) and the European officials. The IMF wants to immediately reduce Greece’s debt burden though ‘haircuts’, a notion Germany will not accept,” TDS added“In Greece, the government will vote on Wednesday and again later in the week on the new austerity measures. They are expected to pass, but as ever, with Greece the expected cannot be taken for granted.”

We will see how the rest of this week plays out. Between Hurricane Sandy shutting markets down and the most recent issues in Europe, the rest of the week should be very interesting for gold and other precious metals. With a traditionally strong month for gold coming up (November), it should be very interesting to see how the gold market responds to all of this.

Tagged under
Read 3937 times
Jeremy Holcombe

Jeremy is a seasoned finance writer who has been studying the gold and silver industry for many years. His vast knowledge in the precious metals sector led him to Goldco Direct, where he is now one of their most recognized writers both on the site and around the web. Along with being a senior Precious Metals writer for Goldco Direct, he is frequently featured on many financial sites on the internet where they tap into his knowledge about gold. Jeremy is passionate about educating investors about the yellow metal as its price continues to rise to record breaking levels.