Gold was up from the far East through the first half of the London market on Monday, declined in New York from the open to the noon hour, but then bounced decisively off of $900, and registered a gain for the day at $905.40/oz., up $3.80. Overnight, gold is little changed.

Platinum seesawed through a $40 range, winding up in the middle of it to end at $2151/oz., up $23. Overnight, platinum has been flat.

Silver peaked at $17.25 shortly before the New York open, was off precipitously from there until late morning, then rallied back to the $17 mark before being knocked lower in the Globex to close at $16.95/oz., up a penny. Overnight, silver has been trending higher.
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Although silver disappointed, gold held onto its gains from late last week and added a bit more, while platinum continued to soar. Gold’s rise to its highest point in three weeks was noteworthy in that it got no help from the U.S. dollar, which strengthened, although the rising price of crude was supportive.

“There is a definite air of the 1970s in recent economic data and the reality of falling economic growth and rising inflation or stagflation,” said Mark O’Byrne, of Gold and Silver Investments Ltd.

Because of that, “With the dollar having strengthened against the euro, the prime reason for gold’s early strength looks to have been inflation hedging buying due to oil going above $127 prior to a small sell off,” O’Byrne wrote.

Gold may not hold above $900, said O’Byrne, as “profit taking is to be expected.” In the near term, “Gold needs to consolidate between $885 and $915 before the next leg up in the bull market,” he concluded.

Perennial skeptic Jon Nadler of Kitco chipped in by writing that gold may be “on a possible route to tests of $915 and maybe $925,” as speculative fund buying gives the metal a boost.

But Nadler added that, as gold prices firmed overnight, “demand in India dipped once again and local prices went to a discount as buyers failed to materialize.”

Meanwhile, global platinum supplies weren’t enough to meet demand in 2007, platinum group metals refiner Johnson Matthey said yesterday. Demand climbed by 8.6% to 7.03 million ounces in 2007, but supply came in at only 6.55 million, leaving a deficit of 480,000 ounces.

Investment demand for platinum climbed 170,000 ounces in 2007, with the launch of two platinum-based exchange traded funds contributing 195,000 ounces to demand for the first time, Johnson Matthey said.

Source: Gold Hangs Onto Its Gains