Gold Tracking Oil Higher
May 22nd, 2008 | By Doug Casey | Category: Gold MarketGold was higher from the far East to the mid-point of London trading on Wednesday, slumped from there into New York’s second hour, bottoming at $916, but then shot higher for the rest of the day including the Globex, and finished at $931.80/oz., up $12.80.
Overnight, gold has been edging lower.
Platinum bounced between $2160 and $2200, with late day buying pushing it to just off its intraday high at $2201/oz., up $53. Overnight, platinum is sharply lower.
Silver matched gold’s chart to a T, pushing as high as $18.10 before easing in later Globex trading to close at $17.98/oz., up 32 cents. Overnight, silver has been flat.
(Click here for charts)
Precious metals investors had much to cheer about yesterday, as all appeared to be gaining momentum in their latest move higher.
It also didn’t hurt that the usual suspects also lined up in their favor, with oil seeking out ever more serious nosebleed levels, and the dollar sinking against the euro, yen, Swiss franc and British pound.
Peter Spina, of GoldForecaster.com is very positive, writing that, “Current market expectations are rather subdued and from a contrarian standpoint that is a rather bullish sign. Gold continues to have inter-market relationships which demonstrate the present gold price is highly undervalued. The possibility is quickly growing for gold to revisit the four figures area.”
However, he notes, “The other side of the short-term risk/reward equation is a sizeable pullback in the oil price as short-term gains appear overextended. The US Dollar’s prospects on the whole remain bleak and any short-term rebounds will be met with heavy selling. How will reversals in those short-term trends translate into the gold price going forward? They could inflict some damage into its renewed and growing momentum. Until the reversal in these pro-gold trends, I would be quite afraid to stand in front of this golden bull!”
Kitco’s Jon Nadler also weighed in on the oil effect, writing that, “If ever there was an oil-dominated trading day, today was it as far as gold was concerned … Trading focus remains on just how far up the value scale crude oil can be pushed by speculators before either demand simply dries up or a global recession is triggered.”
And Peter Grandich, editor of the Grandich Letter, chipped in with, “Oil is obviously leading gold and if the historical gold vs. oil ratio ever returns, we could see gold as high as $1,500.”
Source: Gold Tracking Oil Higher
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