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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: A wave of liquidations
"The reason, according to analysts at the World Gold Council, is that the latest bout of the credit crisis has been deeper and more far reaching. Funds were forced to sell desired assets such as gold to meet margin calls, while weakness in European economies lifted the U.S. dollar, which then pushed dollar-denominated gold prices
lower.
"The fact that gold did not head higher during the current leg of the crisis seems to reflect a combination of the rise in the dollar, deleveraging of commodity positions, sales to meet margin calls, and the unwinding of the long gold, short dollar trade," wrote Natalie Dempster, an analyst at the WGC, in a research report released Thursday."
"A wave of liquidations occurred in September as funds were forced to raise cash in the face of margin calls and massive investor redemptions, according to GFMS.
and massive investor redemptions, according to GFMS.The London gold-fixing price -- used as a benchmark for gold's OTC trading - has dropped $160 this month. It stood at $726 an ounce Thursday morning.
Gold trading in futures markets also went through a similar declining trend. In the two major global gold futures markets in New York and Tokyo, speculators' buy positions have been falling, while their sell positions have been rising.
Some investment funds were forced to sell even their "most desired assets such as precious metals," said Peter Spina, president of GoldSeek.com. There could be "more victims of the fund collapse and more forced liquidations."
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