Precious Metals Have Banner Day
Nov 5th, 2008 | By Doug Casey | Category: Financial NewsGold finally delivered the monster up day many have been anticipating, starting upward at the outset of London trading and pushing higher all day, including a near-vertical $20 jump at mid-morning in New York, until finally finishing on the Globex just off its intraday high at $761.10, up $39.10. Overnight, gold has slipped lower.
Platinum bottomed below $800 in Hong Kong, but then it too was steeply higher through the day, ending at its own intraday high of $843/oz., up $31. Overnight, platinum has edged higher.
Silver blasted from $9.70 in Hong Kong past $10.50 at the noon hour, dropped back to $10.10 at the end of the Comex, then regained some ground on the Globex to close at $10.17/oz., up 38 cents. Overnight, silver has been flat. (Click here for charts)
It was a glorious day for the whole precious metals group yesterday, as rallies were sustained across the board.
An increased appetite for risk was apparently the order of the day, as investors flocked back into equities and commodities in the wake of a dollar that plummeted against the euro, and crude prices that rocketed upward.
Gold rose the most in six weeks amid the broader rally that saw the Standard & Poor’s GSCI Index of 24 commodities climb by as much as 9.3%, the biggest gain since at least 1970. The benchmark Reuters/Jefferies CRB Index responded strongly as well, shooting up by 5.1%.
Excitement over yesterday’s historic election contest was also in the air. “Traders appear to be anticipating a rebound in the economy and overall demand if, as election polls suggest, one party will control both Congress and the presidency,” said Nick Jonson, of Platts Metals Week.
And Cary Pinkowski, chairman of Vancouver, Canada-based CP Capital Group, stated flatly that, “There are no sellers left on base metal and gold.”
As positive as we are on gold, we think that some of this optimism might be overdone. An economic rebound is a long way off, and a good bit of fund deleveraging, which will include some gold selling, still has to be played out.
For the foreseeable future, writes Mark O’Byrne of Gold and Silver Investments, “deflationary pressures continue to be prevalent and central banks internationally continue to aggressively cut interest rates in an effort to stimulate credit growth and inflate their way out of a possible Depression,” thus the new president’s “honeymoon is likely to be very short.”
Source: Precious Metals Have Banner Day
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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.