Platinum rose slowly but surely through the whole day, ending just off its intraday high at $2037/oz., up $45. Overnight, platinum has declined.

Silver followed gold’s lead to a T, closing at $16.84/oz., up 28 cents. Overnight, silver is sharply lower.
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The precious metals had a strong day, as well they should have, given soaring oil prices and a declining dollar. Traders may have even been a little disappointed that the metals’ performance wasn’t a bit better than it was

After acknowledging the buck’s influence on the day’s action, the Hightower Report went on the say that “with a sharp upward explosion in energy prices and a host of physical commodities, it is just as likely that classic inflationary buying was being seen in the gold trade. With the US equity market at times under significant selling pressure as a result of the sharp price gains being registered in the commodity markets, it is also likely that classic flight to quality buying was taking place. While the Dollar Index was weak some traders suggested that without a decline below the Tuesday low of 73.31, the currency influence on gold prices might not intensify. In the end seeing crude oil prices virtually explode during the session Wednesday probably rekindled investment interest for gold from a broad range of angles.”

Looking down the road, wrote James Moore, an analyst at TheBullionDesk.com, “short-term direction is still likely to be dollar-driven.”

But Moore added that “with inflation on the increase, longer-term investors should continue to look favorably towards gold, with the metal likely to carry out further base building ahead of $850 before rallying back towards $1,000 later in the year.”

Crude oil, which remains at nosebleed levels, is a primary driver of inflation, and after oil’s meteoric rise, gold has a lot of catch-up still to play.

And Matt Zeman, a metals trader at LaSalle Futures Group in Chicago believes that the difference between interest rates on euros and dollars is paramount, leading him to conclude that, “Traders are looking at the difference between rates. You’ve got to believe that people are going to step in and buy gold right now.”

Source: Precious Metals Surge