Precious Metals Explode to Upside
Jun 5th, 2009 | By Doug Casey | Category: Gold MarketGold dipped as low as $963 at the open of New York trading on Thursday, but that proved to be the ignition point for lift-off, as the metal soared through the Comex day before leveling off through the Globex to finish at $980.40/oz., up $17.80. Overnight, gold has slipped lower.
Platinum took flight at the same point, and posted a stellar day, nearly reaching the $1300 mark before it flattened to end at $1291, up $56. Overnight, platinum has fallen off.
Silver wrapped up the trifecta in fine style, as it fell nearly to $15.00 just before the Comex open, then rocketed almost to $15.90 and cruised to a close at $15.88, up 57 cents. Overnight, silver is sharply lower. (Click here for charts)
The precious metals sloughed off the whipping they took on Wednesday, and yesterday recaptured virtually all of the lost ground, as crude rallied and the dollar declined. Actually, as the buck wasn’t off all that much, aficionados had to be very pleased with the outcome of the day’s trading.
In words we haven’t heard for a while, “Gold is rising on demand for a safe harbor,” said Philip Gotthelf, the president of Equidex Brokerage Group in Closter, New Jersey. “We still have considerable uncertainty about the dollar.”
The resumption of the dollar’s decline was clearly critical. In May, the dollar fell 6.4% against a basket of major currencies, the biggest drop in 24 years. And yesterday’s drop ignited a general commodities rally, with the Reuters/Jefferies CRB Index of 19 raw materials rising 2.1%.
The market mood was decidedly upbeat, as evidenced by comments like the one from James Moore, of TheBullionDesk.com, who said that, “Given background fears of inflation and fiat currency devaluation, the metal will continue to be viewed favorably by investors … We doubt it will be long before gold tests the high from February.”
There was no change in GLD, the major gold-backed ETF, after it sold off sharply the previous session. On Wednesday, GLD’s holdings totaled 1,132.5 metric tons (36.4 million ounces), down 1.53 tons (49,190 ounces) from Tuesday.
The day’s star performer was platinum, up 4½%. It’s been a very good year for the other silver metal so far, as rightly or wrongly, traders have been figuring the auto industry may have bottomed. Platinum is up 37%, while holdings in ETF Securities Ltd.’s exchange-traded fund backed by the metal have jumped 74% in 2009.
Source: Precious Metals Explode to Upside
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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.