Gold was little changed until London opened, when it rose to an intraday high of $835, but then spent the rest of the day trading weakly, finally finishing at $826.20, up $2.20. Overnight gold is trending higher.

Platinum was up in the European market, but traded rangebound in New York, ending with a nice gain at $1429/oz., up $34. Overnight, platinum has been pushing higher.

Silver was also up strongly in the overseas markets, but fell more steeply and was unable to stay out of the red, closing at $13.46/oz., down 11 cents. Overnight, silver is sharply higher.
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Although platinum did well, and gold was up slightly, silver dropped and, overall, precious metals fanciers couldn’t have been very happy with the outcome of the day’s action, since the falling dollar and rising oil should have been more supportive.

The Hightower Report summarized: “The gold market forged a series of stair steps down from the early morning highs but generally gold prices seemed to prefer positive ground. Clearly the weakness in the Dollar failed to live up to initial expectations for the bull camp and that wasn’t surprising considering that the US Durable Goods report was better than most expectations. Surprisingly the gold market didn’t seem to get a definitive added lift from what seemed to be escalating geopolitical tensions between Russia and the EU. Some gold traders suggested that until the September Dollar Index consistently trades below the 77.00 level, the currency impact for gold might not be definitively supportive.”

Gustav was much on everyone’s mind.

Gold can be expected to benefit if there is any disruption to oil supplies created by the hurricane.

But the turmoil in the weather is equaled by the turmoil in the financial markets.

With widespread expectations that a number of banks, including perhaps some major ones, may yet fail, “Gold is benefiting from systemic fear,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Systemic fear is what’s kept gold off its lows.”

Silver, though, remains shaky. It has fallen 9% this year, compared with gold’s decline of less than 1%. Analysts at Scotia Capital USA wrote yesterday that until silver trades above $14, the metal will be vulnerable to further declines.

Source: Precious Metals Uncertain