Precious Metals Go Soft
Jun 24th, 2009 | By Doug Casey | Category: Gold MarketGold fell below $915 at the mid-point of Hong Kong trading on Tuesday, but that proved to be the low for the day, as the metal rallied from there to the New York open, went flat until mid-morning, when it sold off again, but then pushed higher to the end of the Comex before leveling off through the Globex to finish at $925.80/oz., up $3.20. Overnight, gold has been pushing higher.
Platinum followed up Monday’s beating with a dead flat day, as it never strayed from the $1150-1170 range and ended in the middle at $1159/oz., down a buck. Overnight, platinum is trending higher.
Silver traced out almost exactly the same path as gold, closing at $13.81/oz., up 11 cents. Overnight, silver is sharply higher. (Click here for charts)
Monday’s debacle was likely fresh in traders’ minds as the precious metals limped home with modest gains in the case of gold and silver, unchanged for platinum.
That had to be disappointing to the metals’ fanciers as the dollar, which has been a primary inverse driver for the sector, plummeted against the euro. In addition, rising oil prices should have been supportive. But buyers just failed to appear.
Analysts said investors were simply being cautious ahead of today’s monetary policy statement from the Fed.
“I would be surprised if they did anything dramatic. The Fed is trying to nurse the recovery along without killing off the housing market again. In terms of gold, it keeps the uncertainty up there a bit. That keeps a floor (under prices),” said Michael Wallace, global market strategist at Action Economics.
However, Wallace added, “in the bigger picture, we may see a saucer-shaped recovery, which helps keep a lid on prices.”
Investment in the SPDR Gold Trust (NYSE:GLD), the biggest exchange-traded fund backed by bullion, slipped to 36.37 million ounces on Monday, from 36.4 million. It was the first decline in 11 sessions.
And while platinum continues to languish on a perceived fundamental weakness, John Reade, of UBS in London, wrote that, “We still like platinum’s fundamental demand drivers more than those of gold,” making it even more attractive as an investment.
Source: Precious Metals Go Soft
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