Gold Erases Big Early Losses, Posts Small Gain
Aug 27th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold was little changed in Hong Kong, but tanked at the London open, falling $15, then surged as New York opened, tacking on $25, before a late-day leveling off that took it to a finish at $824.10, up $2.70. Overnight, gold is sharply higher.
Platinum gave up all of its European gains, trading between $1400 and $1415 through most of the day, before a late skid took it back below $1400 and an end at $1395/oz., down $16. Overnight, platinum has been pushing higher.
Silver followed gold closely, but with even wilder swings and a near-75 cent difference between the day’s low and high, all of it tempered by a late sideways session and a close at $13.57/oz., up 10 cents. Overnight, silver is trending higher.
Not a bad day for the precious metals, considering how steeply they were down at the opening of New York trading. It also had to be heartening for aficionados that the gains were logged in the face of a strengthening dollar, which usually sends gold tumbling, but yesterday served only to put a bit of a cap on it.
However, “Rising crude prices are really pulling up gold prices,” said Zachary Oxman, of Wisdom Financial.
Oil was higher as traders watched the development of Hurricane Gustav with a wary eye.
“Were it not for that factor [oil prices], the market would be under $800 by now,” in the opinion of Kitco’s Jon Nadler. “For now, however, gold is watching the Weather Channel.”
But, in addition, physical buyers are beginning to make their presence felt.
“Over the past three trading days, the dollar has regained pretty much all the ground that it lost over the preceding week,” said John Reade, a metals strategist at UBS in London. Nevertheless, “gold has held above $800 despite this strength, supported by extremely strong demand for physical gold.”
As a result, “Gold is positioned for a sharp move higher, although for this to happen, the dollar and probably crude will have to cooperate,” Reade said.
Earlier this month, UBS predicted that gold would recover to around $850 within a month and rise to $900 in the next three months.
Source: Gold Erases Big Early Losses, Posts Small Gain, Seen Following Oil higher
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