Tags: Streible | gold | Facebook | metal

Commodities Broker Streible: Facebook Flop Is Good for Gold

By    |   Tuesday, 22 May 2012 08:01 AM

The failure of Facebook shares to ascend in the wake of its IPO may hurt some investors, but it bodes well for gold, says Phil Streible, a commodities broker at RJO Futures.

Gold’s slide over the past few weeks stemmed partly from investors liquidating their gold investments and using the cash to get a piece of Facebook, he tells TheStreet.com.

“We saw about $2 billion of gold liquidated in the last week or two, washing out most investors,” Streible says. “A lot of people were preparing for Facebook’s IPO, shifting money to play.”

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But now that the IPO has fizzled, these investors will likely return to the safety of oversold safe havens, such as gold and silver, he says.

Gold seems to have found its footing with support at $1,526 to $1,528 an ounce, and the next major resistance point is $1,600, Streible says. It recently traded at $1,580.

Other bullish factors for gold include global economic weakness, which is leading to additional central bank easing, and Greece’s crisis, which has investors looking for safety, he says.

Others agree with Streible.

"In the next few weeks leading up to the Greek election, there will be plenty of opportunities for people to worry about the European debt situation and the health of the euro in general,” Mitsui Precious Metals analyst David Jollie tells Reuters.

“I think that will be positive for gold.”

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Tuesday, 22 May 2012 08:01 AM
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