Precious Metals on a Tear
May 22nd, 2009 | By Doug Casey | Category: Gold MarketGold was up in the far East on Thursday, declined slowly to late morning in New York, but then really ignited, shooting up nearly $20 by the early Globex, then leveled off to finish a second strong day in a row at $953.90/oz., up $16.70. Overnight, gold has been flat.
Platinum, which was higher in Hong Kong, plummeted from there to late morning New York trading, dropping $25, but then abruptly reversed course and bulled its way back into the green, ending at $1149, up $6. Overnight, platinum is unchanged.
Silver submitted a similar pattern to gold’s, but was up even more sharply, rising nearly 50 cents from intraday low to peak, and closing at $14.55, up 30 cents. Overnight, silver is trending higher. (Click here for charts)
The beat goes on, as the precious metals continue to perform in a stellar manner—with gold at its highest since March and silver since February—as the steadily-slumping dollar makes them shine as an alternative investment/currency.
Declining equities, not just in the U.S. but worldwide, also contributed to the metals’ appeal yesterday, while a falling oil price failed to dampen traders’ enthusiasm.
“The fact equity markets appear to have stalled and inflation fears are on the increase should give gold increased upward momentum,” wrote James Moore, an analyst at TheBullionDesk.com.
In the technicians’ view, “Gold prices are expected to continue on their upward path in the near term, with the next key resistance offered at $970 from the March 20 high,” wrote Tom Pawlicki, of MF Global.
“With crude oil breaking out above the $60 level and with index funds pouring money into the entire commodity sector, it is very difficult for the commodity bears to gain much downside traction,” wrote Dan Norcini on jsmineset.com. “The sum of money flowing into tangibles is enormous as a great deal of those funds were sitting in cash on the sidelines and waiting for a signal to get long. That they have done and are now doing and that is where the buying pressure is originating from across the entire commodity complex. Keep in mind that they will buy until they get their allocation done irrespective of any particular fundamental factors. Technical money flows more and more dominate the world of trading and investing and arguing against that kind of money is worse than spitting into the wind. Just like when they are blindly selling – these guys blindly buy and very few are willing to step in front of such a freight train whether it is coming or going.”
And some are beginning to wonder what’s up with GLD. The largest gold ETF has added almost no metal during the recent rally.
Source: Precious Metals on a Tear
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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.