Gold Edges Higher
Dec 10th, 2008 | By Doug Casey | Category: Financial NewsGold was slightly higher in early London trading on Tuesday, but declined from there to the first hour of the Comex, zigzagged its way back to positive territory by early afternoon, then cruised through the rest of the day little changed, finishing at $775.60, up just $4.20. Overnight, gold has been trending higher.
Platinum was holding the previous day’s mark of $830 until New York opened, was off sharply in the first hour, but then went flat until Globex trading pushed it modestly higher, ending at $815, down $15. Overnight, platinum has edged higher.
Silver fared worse than gold, again failing to hold the $10 level reached early in the London session, then trading tightly rangebound between $9.70 and $9.90 straight through the Comex and Globex, and closing at $9.81, down 16 cents. Overnight, silver has pushed higher. (Click here for charts)
Monday’s strength in the precious metals yielded to another lackluster day on Tuesday, as there wasn’t much to lend support. In fact, with equities markets returning to their losing ways, crude declining and the dollar firming against the euro, gold enthusiasts should probably feel relieved that the object of their affection finished in positive territory at all.
“Technically speaking,” wrote Mark O’Byrne, executive director of Gold and Silver Investments, “gold suffered serious damage in recent weeks … [but it] remains very oversold and continues to consolidate and build a firm base.”
Gold supply remains a big question mark, as big producers scale back and smaller ones are forced to shut down by the recession. Of note is that production in South Africa fell by 14% year-on-year in October, the government reported.
South Africa, for nearly a century the world’s largest producer, is now second, after China, and its steadily declining output could lead to a shortfall of as much as 1 million ounces this year, compared with 2007, O’Byrne says.
“Of the world’s three biggest gold producers — China, South Africa and Australia — only China has managed to increase gold production in recent years,” O’Byrne wrote.
“This means that the supply/demand balance in gold is becoming increasingly tight and likely to lead to markedly higher prices in the coming years,” he concluded.
Advertisement
"Dramatically cuts the costs for gold investors..." Financial Times
"Particularly cost effective..." Capital magazine, Germany
Start now with a gram of FREE GOLD at BullionVault here...
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.