Precious Metals All Solid Gainers
May 13th, 2009 | By Doug Casey | Category: Gold MarketGold rose from at the mid-point of the Hong Kong session through the first hour in New York, declined sharply to the late morning, but then took off again and advanced steadily higher through the Comex and Globed, finishing at $922.90/oz., up $9.60. Overnight, gold is little changed.
Platinum was up and down within a range from $1115 to $1130, and settled near its high point, ending at $1131, up $16. Overnight, platinum has been flat.
Silver followed pretty closely, peaking at $14.35, but fell off and then traded sideways through the day, closing at $14.22, up 28 cents. Overnight, silver is slightly lower. (Click here for charts)
Gold led the precious metals solidly higher yesterday, as the usual suspects lined up in its favor, with oil rising and the dollar declining, and perception that inflation may kick in also supportive.
The rally was general. The Reuters/Jefferies CRB Index of 19 raw materials climbed nearly 1%.
The optimism is beginning to seem a bit overblown, as some are thinking like this: “The global recession and the U.S. recession probably is over this month, maybe next month,” said Jan Loeys, of JPMorgan Chase & Co. (NYSE:JPM) in Hong Kong. “Commodities, materials in particular, are going to be benefiting right now as investors start to get a bit worried about future inflation.”
But whether or not the recession is coming to an end, Loeys is likely correct in saying that, “Over the next year or so, we think we are going to be crossing $1,000, probably go ultimately to $1,200, $1,300 just for inflation hedging and lack of supply.”
Loeys concluded that clients “are very worried about inflation in two, three years time … The buying we are seeing now in commodities is really hedging, hedging off the potential risk that we will see a spike in inflation.”
The real story of the year, of course, is with silver, which is up over 25% on the year vs. gold’s near +5% performance. It’s not explainable in terms of industrial demand, which is bound to be off in the downturn. More likely, investors are increasingly coming to treat silver as an investment, like gold, only cheaper.
But it’s come so far, so fast that some caution may be advisable. As Miguel Perez-Santalla, of Heraeus Precious Metals Management in New York, notes: “Silver can still see a correction to come.”
Source: Precious Metals All Solid Gainers
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.