Gold prices fell following the liquidity crunch aggravated

Before the financial crisis in the brightest spot in the gold now passed their prime: With oil prices fell below 78 U.S. dollars a barrel over the past year and hit a new low, as well as the dollar index hit a 16-month high, gold also met with the fate of the sell-off. In the following gold stocks and commodity prices as a whole fell behind, also shows that market liquidity crunch situation is further aggravated. The sale of all assets Last Friday, various types of assets in the global market price is going down. In the tight liquidity situation remains unchanged, all types of investors to sell assets in order to obtain sufficient liquidity. Morgan Stanley World Index (MSCI World Index) in the last week has fallen by 19%. The representative of the overall commodity price movements when the CRB index-week decline to reach a total of 16.1 percent. And over the weekend, after a strong performance in the gold price, can not escape. Message to me Last weekend, COMEX gold futures December contract settled down price of 27.50 U.S. dollars, as much as 3.1 percent, to 859.00 U.S. dollars an ounce. In electronic trading after the close, December gold fell more than 6% to a low of 829 U.S. dollars on the 5th. In addition, NYMEX's WTI crude oil futures prices fell below 78 U.S. dollars over the weekend and hit a year low, which seems to be worried about inflation getting farther and farther away from the market, gold weakened as a tool to hedge inflation appeal. Last Friday, the dollar index was a record 83.191 16-month high. Despite the high in the United States and the rescue package of tax cuts to stimulate, the U.S. is faced with the risk of devaluation. However, the overall tightening in liquidity conditions, the market for the dollar is more preferred. For the same reason, investors sell the assets of all types of goods also continued. U.S. Commodity Futures Trading Commission (CFTC) last week announced the classification of goods report showed that as of Oct. 7 week, the fund in COMEX gold futures in 3354 to reduce the air alone; in the WTI crude oil futures in a reduction of 26,987 More than one, and were part of the holdings of gold and crude oil and air alone. The value of gold is worth looking forward to Gold in last weekend's sell-off to a great extent by the reaction of the market for fear of liquidity crunch. However, such a panic died down, gold's attractiveness for investors will likely be restored. Deutsche Bank over the weekend released the report, the dollar continued to be strong, the price of gold is difficult to significantly rise. Although the fund in the near future to reduce a lot of gold positions, but the speculative money in gold futures and options in the overall net position is still more impressive, which contribute to the continued deterioration of the market in the future hedge risks. In practice, the demand for investment, the world's largest gold ETF SPDR Gold Trust late last week held by the total amount of gold reached a record high of 765.7 tons. In the context of the credit crisis, the relative security of physical gold demand remained strong. Last weekend, the G-7 and G-20 have indicated that they will take all necessary measures to cope with the financial crisis. The most practical approach is to inject more market liquidity. For most investors, however, does not enhance the liquidity of financial markets means that the reduction of systemic risk, on the contrary, the fear of inflation is more likely to enhance the attractiveness of the gold market.