Platinum dropped below $1990 in Hong Kong, then rode a roller coaster through the day, to end at $2013/oz., down $24. Overnight, platinum is slightly higher.

Silver declined gently until the New York open, after which it fell off a cliff, dropping 40 cents in less than an hour, but it too pushed higher after noon to close at $16.44/oz., down 41 cents. Overnight, silver is sharply lower.
(Click here for charts)

The precious metals’ rally lasted all of a day, as they reverted to a downtrend yesterday with a pickup in the dollar.

Gold was also pressured early in the session by oil prices that were off sharply and a stock market that rallied strongly. Even though both reversed trend later in the day, gold was unable to recover.

“The market’s roller-coaster pattern continued amid the high-noon standoff developing between the Fed and the U.S. dollar’s morticians,” said Kitco’s Jon Nadler.

The tension between the dangers of letting inflation run vs. raising rates in order to head it off does seem to be ramping up. Observers are watching the dollar’s relationship to the euro as an indication of market sentiment.

At the moment, “The perception … is that there will be higher interest rates,” said Frank McGhee, of Integrated Brokerage Services in Chicago. “Another break in the euro, and you’ll just see the world step on gold.”

Source: Precious Metals take it on the Chin Again – Interest Rate Uncertainty Driving Market

Overnight, gold has edged higher in the overseas markets.

Platinum also caught fire at the New York open, and moved higher through the day with only minor pullbacks, ending at $2081/oz., up $49. Overnight, platinum has been pushing higher.

Silver followed gold’s chart pretty closely, although it didn’t fare quite as well in the afternoon, closing at $16.65, up 16 cents. Overnight, silver has been trending higher.
(Click here for charts)

A very interesting day for the precious metals, especially gold, with the metal moving sharply higher despite the headwinds set up by the usual suspects, as the dollar held steady to higher and oil retreated.

What happened?

One opinion: “Gold surged initially on technical buying and short covering prior to weak data in the form of Empire and Philly Federal Reserve indices, industrial production, weekly jobless claims and the TICs data — all of which were neutral to negative, which exacerbated the move to the upside” for gold, said Mark O’Byrne, of Gold and Silver Investments Ltd.

One day, of course does not a trend make, particularly in light of the metals’ recent weakness, but the day did have some optimists flying the up banner.

“You’re seeing some new buying come back into gold,” said Frank McGhee, of Integrated Brokerage Services in Chicago. “The dollar has stopped its immediate- term rally. Gold is still $200 too cheap, given where oil is.”

Needless to say, adding $200 would take gold well into new record territory.

If gold should detach from oil, as traders come to see it as a cheaper alternative inflation hedge, it will be a radical departure. Last year, gold moved in tandem with oil 92% of the time, according to Bloomberg.

But even gold bear Dennis Gartman, editor of the Gartman Letter, admits that, “Crude is inordinately expensive relative to gold.”
Source: Gold Stages Strong Rally