Precious Metals Spike, Dollar’s Woes the Cause
Aug 1st, 2008 | By Doug Casey | Category: Financial News, Gold MarketIt was a banner day for the precious metals Thursday as gold, silver, and platinum all posted solid gains on the day. Gold recovered from its pounding on Wednesday, rising slightly during Far East trading before shooting up during the NYMEX. Gold finished up $7.90, at $913.30/oz. Overnight, gold traded lower.
Platinum traded sharply up in the Far East to an intraday high of $1761.50/oz. While the metal slid slightly in later sessions, platinum still closed at $1736/oz., up $14. Overnight, platinum dipped sharply.
Silver actually dipped a little bit in early trading. This all changed, however, at the start of the NYMEX session when silver prices surged to an intraday high of $17.897/oz. Silver finished up $0.37 to finish at $17.71/oz. Overnight, silver also trended lower. (Click here for charts)
The rise in precious metals was fueled largely by the dollar’s weakness against other major currencies and troubling news for the U.S. economy.
“Dollar weakness and the GDP surprise this morning are pushing the market up in gold,” remarked Zachary Oxman of Wisdom Financial, referring to reports Thursday that the U.S. GDP grew by an annualized 1.9% in the second quarter, lower than expected.
It seems likely that the pullback from Wednesday’s assault on the $900 barrier will continue in the near future.
Silver’s large gains were also aided by reports that China will remove tax rebates on silver exports from that country.
“It is likely that the abolition of the rebate will depress exports,” wrote analysts at Barclays Capital. If so, we will likely see lower global supplies and higher prices for silver in the near future.
Source: Precious Metals Spike, Dollar’s Woes the Cause
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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.