Gold Gains, Breaking $900, Platinum Falling Toward Parity
Oct 9th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold was sharply higher in the far East on Wednesday, pushing past $900, but then got stuck in a range between there and $920 straight through the Globex, seesawing back and forth and finally finishing at $906.10, up $19.00. Overnight, gold is sharply lower.
Platinum, which at their peaks was trading for well over twice the price of gold, edged closer to parity with the yellow metal, coming well off its Hong Kong low of $950, but still ending in the red at $1008/oz., down $7. Overnight, platinum has edged higher.
Silver punched through $12 right at the end of Hong Kong trading, approached it twice again during the first hour of the COMEX, but then fell off and traded sideways from mid-morning through the Globex, closing at $11.78/oz., up 22 cents. Overnight, silver has dropped off. (Click here for charts)
While it wasn’t a spectacular day for gold, the metal prolonged its steady, uptrend in the face of continuing economic turmoil around the world. Yesterday, it pulled silver along with it, although platinum languishes still.
The rally showed real strength, coming as it did on a day in which the dollar barely budged against the euro and crude pulled back. In fact, gold has been running counter for the past three weeks, as the buck gained 4% against the euro while gold advanced 15%.
That has the bulls stamping their feet. “Coordinated central bank aggressive interest rate cuts should lead to gold surging in value in the coming months” as “currency devaluations look increasingly likely,” said Mark O’Byrne, of Gold and Silver Investments.
“Gold’s ultimate status as a safe-haven asset is showing its luster again as the financial crisis escalates,” said Peter Spina, president of GoldSeek.com. “Paper money from all walks of life is flowing into gold as uncertainty and fear rocket to new heights.”
Against that backdrop, platinum’s fall has been stunning. Although scarcer than gold, and subject to the uncertainties of South African mines, it is threatening become less precious than gold for the first time since 1996.
The ratio of the two metals’ prices fell to 1.1083 yesterday, the lowest since May 8, 1997. Platinum has skidded by 14% as gold posted that 15% three-week gain.
“Greed is almost gone from all markets and most things are driven by fear,” commented Walter de Wet, of Standard Bank Group in Johannesburg. “That platinum isn’t gaining tells us that the market values liquidity. Gold is much more liquid than platinum.”
Source: Gold gains, breaking $900 and holding - Platinum falling toward parity
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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.