Gold Pushes Higher
May 21st, 2008 | By Doug Casey | Category: Gold MarketGold was flat from the far East straight through London trading on Tuesday, but it took off in the second hour of the New York session, shooting as high as $923.40 before tailing off after the noon hour and finishing at $919.00/oz., up $13.60. Overnight, gold has been pushing higher.
Platinum was all over the place, from a high near $2170 in Europe to a low near $2120 in New York, but when all was said and done it ended with a loss of just $3, to $2149/oz. Overnight, platinum has been trending higher.
Silver’s rocket launch came at the same time as gold’s, and it was even more dramatic since the metal didn’t pull back in the afternoon hours, but kept on going to close at $17.66/oz., up 72 cents. Overnight, silver is sharply higher.
(Click here for charts)
Although platinum lagged, it was otherwise a banner day for the precious metals as both gold and silver appeared to build on earlier consolidations. Gold is now up 6% over the past four sessions.
And of course it didn’t hurt that the usual suspects, high-flying oil and the tanking dollar, both lined up in their favor.
The latest analyst to draw attention to the gold/oil relationship was Peter Spina, of GoldForecaster.com.
“As oil nears $130,” Spina wrote, “the historical relative value of gold to oil is now again at extreme lows. This measurement, among with others, places the true value of gold much higher than we are seeing it presently trade at. With today’s very weak US Dollar and with continual prospects of additional expansion of the money supply, gold becomes even that more attractive at this present time. The short-term prospects are encouraging and a return to the mid-$900’s is quite possible over the coming weeks. Despite the appearance of weakness in this market, the short-term bullish factors could become drivers of the gold price higher. Sub-$900 pullbacks are going to look more and more attractive going forward. Capital seeking shelter from monetary debasement will continue to deviate to preservation assets such as gold and silver.”
Technicians were pleased, as well. “The technical picture has gone very positive on gold and so we could see a good run now,” wrote Julian Phillips, also of GoldForecaster.com.
With inflation rising, “this is the beginning of what we feel will be a decaying global economic picture, with the exception of Asia, in 2008, which will benefit gold and silver, Phillips wrote. So, “I don’t think the summer will see a long period of ‘doldrums’ as many expected.”
Source: Gold Pushes Higher
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