Gold was slightly lower until the open of the New York session on Thursday, but went vertical at that point, adding $20 in an hour and peaking at $908 before easing during the rest of the NYMEX and dropping further in the Globex to fall back below $900 and finish at $898.00/oz., up only $4.40. Overnight, gold is trending higher.

Platinum pushed past $2090 in Hong Kong, but that was its high for the day, as it sold off whenever a rally began and ended near its intraday low at $2041/oz., down $42. Overnight, platinum has edged higher.

Silver followed gold’s chart almost exactly, peaking around the same time at $17.72, then declining to close at $17.32/oz., down a penny. Overnight, silver has been pushing higher.
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Although they ended up with not much to show for it, it was a pretty good day for the precious metals, considering that the equities markets turned around, the price of crude plummeted, and the dollar edged slightly higher.

Gold battled the headwinds blowing against it because, “In the medium to long term, the combination of strong international safe-haven demand and decreasing production and supply of gold in most major producers, and particularly in South Africa, will likely result in gold going significantly higher in the coming months,” said Mark O’Byrne, of Gold and Silver Investments Ltd.

The production falloff in South Africa is precipitous, O’Byrne said. “South African gold output in April fell more than 10% in volume terms, compared with a year earlier … [Further,] South African production of gold was over 1,000 tonnes per annum in 1970 and has been steadily declining to nearly 250 tonnes per annum today.”

Output “has fallen sharply after state-owned power utility Eskom struggled to provide sufficient power to mines,” O’Byrne said. And, “Eskom have admitted that the power and electricity problems are a major challenge and may take years to rectify, which would likely result in further falls in gold production in South Africa.”

Peter Spina, of GoldSeek.com, believes gold is a tightly coiling spring. With oil “now solidly above $100, gold should easily be above the four-figures mark,” Spina said. “The longer the oil price stays above the $100 level, the more appealing gold will become and the investment buying will support the gold price during this traditionally weak seasonal period.”

Overall, “Pressures are building within the gold and silver complex, this may be another pop higher followed by consolidation, but I expect one of these rallies to gain traction and ignite the next leg higher in the gold price,” Spina wrote. “It could be well underway by summer’s end.”

Source: Gold Shoots Higher, but Pulls Back