Gold drifts lower
Posted on: May 13th, 2008 | By Doug Casey | Filed under Gold Market
Gold was very rangebound from the foreign markets through the New York session on Monday, with buyers emerging when it dropped below $880 and sellers equally present when it topped $885, and it stumbled into a finish at $882.20, down $1.80.
Overnight, gold has slipped slightly lower in the overseas markets.
Platinum fell below $2040 at the New York open, but caught fire from there, moving steadily higher until a slight easing during the Globex, and ending at $2105/oz., up $18. Overnight, platinum has fallen sharply.
Silver enjoyed a steeper rise than gold’s, leaping from a low of $16.70 at the open to nearly $17.30 at noon, before it too slipped in the afternoon hours to close at $17.13, up 34 cents. Overnight, silver has been flat to slightly lower.
(Click here for charts)
A lackluster day for gold was somewhat compensated for by the positive action in platinum and solid strength in silver.
Gold was supported by a falling dollar but undermined by a step back in the crude price juggernaut.
“Gold is watching while the dollar weakens … and is battling to find direction,” wrote Julian Phillips, of GoldForecaster.com, as he expressed disappointment that the market has not responded more strongly to recent record oil prices and to Monday’s skidding dollar.
Additionally, Phillips added, “We are headed into the quiet season for gold [May to the end of August] but at any moment, reports of another systemic fracture in the financial system could liven it up as happened last year when the sub-prime crisis emerged from the shadows.”
“Many of the factors that have supported the bull market for the precious metals remain in place,” say analysts from Natixis Commodity Markets Ltd.
“Inflationary pressures associated in part with the dramatic rise in commodity prices are continuing; uncertainty in the financial markets as the sub-prime crisis continues to unravel remains an issue … [and there is] increasing acceptance of commodities as an asset class,” they said.
Nevertheless, “these positive fundamentals do not necessarily justify a straight progression for precious metals prices,” the Natixis analysts said, adding that they expect prices for gold to average $875 in 2008.
Under that scenario, gold may already have peaked for the year. We doubt that.
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.