Gold moved above $900 late in the Hong Kong session on Monday, traded between there and $910 all day long, with only one brief peep above and below, and finished at $902.30/oz., up $4.00. Overnight, gold has slipped lower.
Platinum pushed higher in the overseas markets, reaching $970, and that was the peak for the day although the metal did cling to positive territory in the end at $959/oz., up $8. Overnight, platinum is trending lower.
Silver reached the $12 mark early in the London session, then it too got trapped inside a tight range, vacillating between there and $12.10, when it too caught fire and spiked 80 cents over the next two hours, topping out at $12.07 before settling right on the nose at $12.00/oz., up 6 cents. Overnight, silver is little changed. (Click here for charts)
It was a breather of a day for the precious metals, as we might have suspected after Friday’s moonshot action. The heartening news is that, with a pullback that might have been anticipated, buyers met sellers on a near 50/50 basis through the session.
Among the usual suspects, gold—which notched a 4-month high—may have gotten a small boost from rising equities and a dropping dollar, but the effect of these was counterbalanced by slumping oil prices.
Is this rally sustainable? It’s hard to say, but it sure has happened fast. Gold has risen nearly a hundred dollars an ounce in less than two weeks, while silver is up 14% over the same period.
Those who love paper are casting their votes for gold, as well. Investment in the SPDR Gold Trust (NYSE: GLD), the biggest exchange-traded fund backed by bullion, rose 4.7% last week, to 832.6 metric tons, or 26.77 million ounces. GLD’s vaults now hold a record amount of metal.
Many analysts are taking the precious metals’ strong performance as a precursor of inflation. For example, “Massive injections of liquidity into the global banking system will serve to drive gold prices higher,” said Dennis Gartman, editor of the Gartman Letter.
And another factor, wrote Ashraf Laidi, of CMC Markets in London, is “widespread global economic gloom and ultra-low global interest rates … As the price of money [interest rates] is held down by central banks, the price of its competitor [gold] pushes higher on the lack of yield reward in monetary alternatives.”
Source: Precious Metals Hold Friday Gains
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