Precious Metals Rise with the Stock Market
Oct 29th, 2008 | By Doug Casey | Category: Gold MarketGold pushed higher in Hong Kong, peaking at $755, then declined slowly until the late morning in New York, bottoming at $728, and finally rose again slowly through the Globex to finish at $743.80, up $15.20. Overnight, gold has edged higher.
Platinum was rangebound through most of the New York day, but rallied strongly after the Comex closed, ending at $825/oz., up $44. Overnight, platinum has fallen off.
Silver went on a very wild ride, pushing to near $9.30 in the far East, jumping off a cliff once London opened, falling below $8.50, shooting back above $9.10 at the New York open, then getting slammed back below $8.60, and finally rising again from late morning through the Globex, to close a most tumultuous day at $9.19/oz., up 14 cents. Overnight, silver is trending higher. (Click here for charts)
It was a volatile day for the precious metals yesterday, but in the end all ended with at least modest gains. Soaring equities probably served to cap any advances somewhat, and falling oil also worked against them, while a weaker dollar helped out.
Extreme unpredictability remains the order of the day, equally with gold as with the stock market. The bull is not quite ready to stampede as yet.
As James Moore, of TheBullionDesk.com, put it, “with volatility still at record levels and hedge funds still seeing large scale redemptions, the metal remains at risk to a bout of selling.”
Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago, states flatly that, “Any big rallies are going to be sold.”
However, Zeman adds, “If and when the credit markets are functioning normally again, they’re going to start talking about inflation, and gold can spike $100 in a day. But now, the biggest reason gold is suffering is that all this money is staying in cash or flocking to Treasuries.”
Zeman believes that if equities markets turn around, that will be positive for metals, rather than drawing money away from them. “You get a bit more risk appetite when equities are doing better,” he notes. “If sentiment is positive, we will see money come back into commodities.”
Meanwhile, the SPDR Gold Trust, the largest gold ETF backed by bullion, stood at 749.21 tons Monday, up 2.15 tons from Friday. It was the first rise since gold held by the fund hit a record high of 770.64 tons on October 10.
Source: Metals rise with stock market - Silver has wild up and down day.
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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.