In light of this morning’s sell-off in gold, coupled with last week’s substantial decline, UBS analyst Edel Tully explained her reasoning for the yellow metal’s weakness in a note to clients.
“Gold is one of the few assets that remains in positive territory this year, in a sense it is one of the last assets standing, and because of this as investors head for cash they sell the assets that have performed,” Tully wrote.
“Essentially gold is a victim of its own success as liquidity trumps.”
Nic Brown, a commodities strategist at Natixis, provided his thoughts as well this morning on the move lower in the gold price. ”The rise in volatility taking place in the gold price was clearly an indication that gold was no longer a low-risk asset,” he wrote. “So there are a few signs there that would have given you pause for thought, but inevitably when the move happens, everyone is taken a little bit by surprise.”
Brown went on to say that “I would suggest that part of what is happening is a collective move away from commodities by investors. The fact that there is carnage going on across the commodities spectrum indicates there are a fair few investors who are getting cold feet at this stage and that has hit some precious metals disproportionately.”
West Kirkland’s Nevada Exploration Yields Positive Results
* The TUG property is contiguous with 900 square kilometers of mineral rights in the Long Canyon Trend that the Company has optioned through a recent transaction with Rubicon Minerals
* Coupled with an option agreement with Newmont Mining, the option agreements give West Kirkland a dominant land position within the Long Canyon Trend and will be the focus of the Company's exploration efforts in Nevada