Gold, Silver Surge
May 7th, 2009 | By Doug Casey | Category: Gold MarketGold started up in the far East on Wednesday and continued higher to mid-morning, eased a bit to the noon hour, but then resumed the uptrend through the rest of the Comex and the Globex, finishing at $911.00/oz., up $15.10. Overnight, gold has edged higher.
Platinum moved into positive territory late in the Hong Kong session and held there for the day, trading rangebound between $1130 and $1140 and ending at $1135, up $8. Overnight, platinum is much higher.
Silver had a very good day, consolidating recent strength by moving sharply higher just before the New York open, hitting peaks above $13.80 twice during the session, then easing later in the day to close at $13.73/oz., up 41 cents. Overnight, silver is pushing higher. (Click here for charts)
Gold and silver both turned in solid performances yesterday, with platinum lagging a bit behind but still finishing to the plus side. The usual suspects provided some lift, with oil pushing higher and the dollar dropping off.
The metals also benefited from a more general commodities rally that saw the UBS Bloomberg Constant Maturity Commodity Index of 26 futures rising as much as 2.9, to push it above the 1,000 mark for the first time since November.
“Gold has caught a whiff of a broad-based commodity rally on the back of today’s better-than-expected ADP report,” said Ralph Preston, of Heritage West Futures in San Diego. “However,” he quickly added, “trend forces are neutral and gold bulls are being held in the corral as they are unable to overcome $915 resistance in today’s trade.”
As always, the currency factor underpins everything.
“Spot gold has been up for the last day or two on a weak dollar,” said George Gero, vice president, RBC Capital Markets Global Futures, along with “concerns over the U.S. bank stress test results,” which will be released today.
Pre-release scuttlebutt has seen various figures published on the amounts needed to comply with the government-administered test, with the New York Times claiming that Bank of America alone will need more than $30 billion in additional capital.
Summarizing the present outlook, Miguel Perez-Santalla, of Heraeus Precious Metals Management in New York, wrote that: “The precious metals market remains guardedly bullish … It appears that only investment money with no home in the capital markets has found its way into precious metals, and once something looks good on the other side, it could pull the rug out from under these prices.”
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