Precious Metals Rally
Jan 9th, 2009 | By Doug Casey | Category: Financial NewsGold was flat until the opening of the New York session on Thursday, at which point it suddenly went vertical, bursting to a high of $864 before settling into a $5 trading range for the balance of the day that carried it to a finish at $856.90/oz., up $14.90. Overnight, gold is little changed.
Platinum fell just short of the $1,000 mark in Hong Kong, retreated to near $960 at mid-morning, then rallied slowly but steadily to end at $987/oz., up $20. Overnight, platinum has edged lower.
Silver was off early, bottoming at $10.79 at the mid-point of London trading, but it spiked from there through New York’s first hour, peaking at $11.32 before falling gently over the course of the day to close at $11.10/oz., up 8 cents. Overnight, silver is trending higher. (Click here for charts)
Gold rose the most in a week and led the precious metals higher on a solid day, as traders ignored another decline in crude and shaky equities, and focused instead on a sinking dollar.
The advent of today’s nonfarm payroll report likely also played a part, with investors factoring in yet more ghastly numbers after ADP’s earlier grim report.
“If it’s the case that there’s not a currency people trust, then the metals are going to hold their value,” said Tom Hartmann, a commodity analyst at AltaVest Worldwide Trading in Mission Viejo, California. “People would start looking at gold as an alternative investment.”
“It looks like deflation might be holding on as a theme,” Hartmann added.
And looking at the bigger overall picture, economists at Action Economics wrote that, “It’s expected that external factors will continue to be the main driver for gold … Safe haven buying could feature on dips, with foreign exchange market volatility and geopolitical risk making gold a safer alternative investment.”
The geopolitical risk is probably intensifying as the Middle East threatens to come even more unraveled with rocket attacks from Lebanon against Israel raising the possibility that a second front could open in the current bloody conflict.
As strong as gold’s prospects seem to be, analysts warn that silver and platinum, with their wider industrial applications, could trail gold’s performance in the upcoming year, as they did in 2008.
Advertisement
Bullion Vault, #1 for direct gold ownership
* 8.5 tonnes of gold
* Over 55,000 users
* $250m in client holdings
Bullion Vault: the online gold market to buy gold, own, and sell gold at current gold prices. Gold trading - from one gram up.
Find out more about the most cost-effective route to owning gold today and claim your gram of free gold here.
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.