Precious Metals Little Changed, LME Holiday Makes for Thin Trading
Aug 26th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold had a day of not much in the way of action, as the London exchange was closed for holiday and the New York market remained pretty much stuck between $820 and $825, finishing at $821.40, down 80 cents. Overnight gold is sharply lower.
Platinum was rangebound between $1400 and $1420, ending in the middle at $1411/oz., down $6. Overnight, platinum is little changed.
Silver was similarly lackadaisical, but with a bit more of an upward bias, closing at $13.47/oz., up 14 cents. Overnight, silver is off steeply. (Click here for charts)
The day was pretty much as would be expected under the circumstances, low volume, a slightly strengthening dollar, and slightly rising oil. Gold might have made more hay out of plunging equities, but it didn’t happen.
Analysts are making a strong distinction between the long term trend and the day to day action.
“Gold remains hesitant and is not getting clear direction from the dollar which is essentially flat,” wrote Mark O’Byrne, executive director at Gold and Silver Investments Ltd.
“Higher oil prices and weakness in equity markets should result in gold remaining well bid as this market session progresses, but given the degree of macroeconomic and geopolitical uncertainty anything can happen in these markets in the short term,” O’Byrne said.
It will be interesting to see what happens as we move into the last quarter of the year, typically the highest of demand times for precious metals.
Julian Phillips, an analyst at GoldForecaster.com, said he believes that the dollar is having “less and less effect at the moment as we run out of time before the high season in gold begins.”
Despite the recent price pullback, physical demand for gold has remained at very robust levels in the U.S., India, the Middle East and Asia. Most dealers cannot get their hands on sufficient product to satisfy their customers.
Demand for American eagles has been so far beyond what the U.S. Mint had projected that it was forced to suspend sales for a week. Now, strict rationing is in effect.
“The bottom line,” O’Byrne says, “is that this lack of supply and huge demand will result in materially higher prices in the coming weeks.”
Source: Precious Metals Little Changed, LME Holiday Makes for Thin Trading
Advertisement
The new Debt-Free Index CD is comprised of equal parts Singapore dollar, Japanese yen, Swiss franc, Australian dollar and Brazilian real. Why these currencies? All 5 economies have a strong balance of payments—a factor that could aid performance against the U.S. dollar.
Of the 5 economies, only Australia has a trade deficit—and the gap appears to be narrowing. Concerned about investing in a weak U.S. dollar? Consider this new Index CD, it is available in 3- and 6-month terms with a $20,000 minimum deposit. Apply today here
This CD is FDIC insured against bank insolvency, but please keep in mind that you could lose principal as a result of currency fluctuation.
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.