Precious Metals Post Gains
Apr 23rd, 2009 | By Doug Casey | Category: Financial NewsGold was flat until the noon hour on Wednesday, when it finally made a modest upmove and held in positive territory despite easing on the Globex to finish at $890.70/oz., up $7.40. Overnight, gold has inched higher.
Platinum made its big move just after Hong Kong closed, adding about $25, then leveled off and did little for the rest of the day, ending at $1169/oz., up $16. Overnight, platinum is sharply higher.
Silver had a strong day, rising from unchanged at the beginning of the New York session to a peak just short of $12.40 on the Comex, before sliding on the Globex to close at $12.32/oz., up 26 cents. Overnight, silver is trending higher. (Click here for charts)
There were no really major moves among the precious metals yesterday, but all posted decent gains against a backdrop of wildly volatile equities, declining oil prices, and a weakening dollar.
Analysts cited rising demand for a store of value after a gloomy projection from the International Monetary Fund that foresees a significant contraction in the global economy this year.
Yesterday, the IMF forecast a 1.3% decline in the world economy this year, compared with a 0.5% expansion estimated in January, and said growth is likely to be slower next year than previously expected, 1.9% vs. January’s 3% figure.
“What is supporting gold is the continued uncertainty in the global economy,” wrote John Gross, the president of J-E Gross & Co., a metals-industry consulting company in Cranston, Rhode Island. “We are in the midst of a ‘sea change’ where gold is the safe haven for investors.”
Further, “The market is divided between those who see inflation, due to the massive infusion of liquidity into the financial system, versus those who expect a deflationary environment going forward,” said Gross, who is also publisher of the Copper Journal.
“I believe the market is in a consolidation phase, where it has been moving sideways over the past two weeks between $900 (resistance) and $865 (support),” Gross concluded. “If the $865 level fails to hold, the next level of support is $825. Conversely, if gold can get past $900 resistance, it may challenge the double top at $1,000.”
And platinum stayed strong as imports into China surged 35% in March from a year earlier. The Chinese government increased the amount it will spend on subsidizing purchases of new vehicles from 600 million to 1 billion yuan, the Ministry of Commerce and Ministry of Finance said yesterday.
Source: Precious Metals Post Gains
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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.