Such a Day!
Jun 7th, 2008 | By Doug Casey | Category: Gold MarketGold made no sudden moves on Friday, but just moved steadily higher from the London open straight through the Globex, pushing back over $900 late in the day and finishing at $902.20/oz., up $24.20. For the week, gold gained 1.8%.
Platinum was strongly higher, peaking at $2090 near the noon hour before easing in late trading to end at $2069/oz., up $63. For the week, platinum tacked on 3.1%.
Silver was near flat until mid-morning, but then it caught fire and pushed upward for the rest of the day, closing just off its intraday high at $17.50/oz., up 35 cents for the second straight day. For the week, silver added 3.7%.
(Click here for charts)
It was of course an expectedly big day for the precious metals, what with skyrocketing oil prices, a cratering stock market, and a sledgehammer attack on the dollar. The news was so bad fanciers might have been hoping for even bigger moves, but couldn’t have been very dissatisfied with what they got.
Gold’s gain was the biggest in six months, and it closed at its highest level since May 28. At least for now, the metals’ strong underlying fundamentals seem to have merged with the kinds of unforeseen shocks that can ignite a mania.
The prospects for an even-further slowing economy are being ignored as gold’s traditional flight-to-quality status is affirmed.
Mark O’Byrne, of Gold and Silver Investments Ltd., summed up the situation by writing that the “surprisingly bad jobs data has reversed recent short-term trends in markets … Risk aversion was witnessed immediately after the report, with the dollar and international equity markets selling off and gold immediately rallying strongly.”
Is the perfect storm brewing? That’s unknowable, but Peter Spina, an analyst at GoldSeek.com is a believer that the elements of the next big upmove may be coming together.
“Conditions remain excellent for gold to rally with further fading of this fantasy that all is OK — monetary wise,” Spina wrote.
“When you look at all the factors going against the value of the U.S. dollar, there is a list and it is a lot longer than what the dollar has going for it,” he added.
Going forward, Spina concluded that a “low- to mid-$900s gold price looks favorable in the short term [and] $850-$875 is gold’s first strong support floor on pullbacks.”
Source: Such a 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.