Precious Metals

Gold was flat until just before New York trading opened yesterday, when it suddenly shot northward by $25, a gain which was all given back by 1:00, after which some late-day buying pushed the metal back into the black and a finish at $802.90, up $8.20. For the week, gold lost 3.3%.

Platinum tried to break past Thursday’s $1380 close several times, but failed each time, eventually drifting lower to end at $1354/oz., down $26. For the week, platinum slumped 7½%. <

Silver had another dismal day after breaching the $13 mark in New York’s first hour, a high point that was followed by a precipitous fall that dropped the metal below $12.10 just after noon, and some modest late-day buying brought it back only to a close at $12.22/oz., down 54 cents. For the week, silver plummeted by a ghastly 10%.
(Click here for charts)

Gold’s performance wasn’t too bad, considering that it got little support from the usual suspects, with the dollar flat against the euro and crude’s slide continuing, but silver diverged big time, reflecting its status as primarily an industrial, rather than an investment metal.

Clearly, though, any rise in the gold price is being capped by a dollar whose recent strength continues to confound market analysts.

Gadfly Charleston Voice put it this way: “Even the most casual dollar watcher is amazed at the dollar's recent strength. It's as if a starter pistol was fired, and up it went with no faltering, hesitating, or backfilling. Not only is this behavior uncanny in our view, but also highly suspicious as to its ignition. It's ascent is nearly vertical, and inconsistent with past performance.”

Money is going somewhere, but where?

During the week “global investors took flight ... and they sent world markets of various kinds reeling,” said Kitco’s Jon Nadler. “It is merely a plain and simple flight - for the 'Exit' signs.”

With commodities down across the board, and equities having sold off, traders must be selling Peter to placate Paul. Or perhaps they’ve decided that, for the moment, cash really is king.

Looking ahead, though, Mark O'Byrne, executive director at Gold & Silver Investments Ltd., said that, “With gold demand internationally remaining extremely strong due to inflationary and macroeconomic concerns and uncertainty regarding the outlook for financial markets internationally, gold remains oversold and will likely resume its upward trend in the coming weeks.”