Precious Metals Mixed
May 28th, 2009 | By Doug Casey | Category: Gold MarketGold was down from the far East to just before the New York open on Wednesday, bottoming at $948, but moved sharply higher to the noon hour, reaching $959 before falling steeply again into the Globex and leveling off just in the red to finish at $948.30/oz., down $3.80. Overnight, gold has edged higher.
Platinum spent nearly the whole day rangebound between $1130 and $1140, before ending near the low end at $1133, unchanged. Overnight, platinum is slightly lower.
Silver noodled around the $14.50 mark from Hong Kong to the New York open, then followed gold strongly higher but outdid its sister metal, adding 50 cents to nudge the $15 mark before subsiding and coasting to a close at $14.75, up 14 cents. Overnight, silver is trending higher. (Click here for charts)
The precious metals were quite a mixed bag yesterday, with gold finishing lower, platinum flat, and silver solidly in the green. Again, the dollar was the primary driver among the usual suspects, with its strength undercutting gold’s appeal.
But the downtrend was likely tempered a bit by rising oil prices.
Kitco’s Jon Nadler, who tends toward the negative, stated flatly that, “The market is overbought,” then asked, “Where are the jitters? North Korea did not do the trick … Add it all up, and we see profit-taking as imminent.”
But in an interview from Hong Kong, noted market analyst Marc Faber went way out on a limb and said he sees the U.S. entering a “hyperinflation” that will be “close to” Zimbabwe.
“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”
Faber added that, “I don’t think that gold will run up right away. I never sold gold and I’m still buying gold … [because it] has been an adequate hedge against inflation … If you bought it in 1980 at the price of $850, then it hasn’t been a good hedge against inflation, but if you bought it in 1999 at $251, then it has done very well.”
Inflation? No way, Nadler says. He might as well have been responding to Faber when he said: “Where is inflation? A speck on the horizon.”
Nevertheless, the funds continue to pile into metal. Hedge funds and other large speculators increased their net-long position in New York gold futures last week, by 7.7% over the previous week, according to CFTC data.
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