Precious Metals

It was a wild ride for gold on Monday, with a near $60 swing between low and high, with much of the action coming on the Globex, after the bailout vote, as the metal spiked to $925 before subsiding to finish at $903.50, up $24.60 from Friday. Overnight, gold has fallen off.

Platinum fared poorly, however, falling through the COMEX and only rising slightly on the Globex to end at $1060/oz., down $47. Overnight, platinum is trending lower.

Silver also did much worse than gold, remaining in negative territory all day, and closing at $13.08/oz., down 22 cents. Overnight, silver has slipped lower. (Click here for charts)

It was a day of mixed results yesterday, as gold’s unique status as money launched it on a steep upward trajectory, while its sister metals—with their far greater industrial exposure—failed to keep pace.

Investors’ traditional tendency to flee to gold as a safe haven could not have been more evident than it was in Monday’s trading, as the usual suspects both moved against the metal, with oil falling and the dollar rising. Is this the decoupling that many have said was eventually in the cards?

It’s still too early to tell, especially with the massive resistance that’s obvious at the $900 level. But if gold follows up today’s close above the mark by remaining there for several days, it’s likely to be off to the races.

Peter Spina, of Goldforecaster.com, summarizes: "Gold is pushing against the $900 technical resistance area as the financial crisis ensues and elevates. Yes, the US Dollar Index is doing well, but remember that it is just a relative measurement against other paper currencies. The true measure is against gold and today we are witnessing gold rise against a strong US dollar meaning it is rising even more in € gold terms and other foreign currencies.

“When you have a slowdown of credit creation you have a liquidity crisis and as the situation accelerates to new levels, more desperate actions are being taken. Today the Federal Reserve announced new measures to keep the system from collapsing. By increasing short-term loans (84-day loans) to $225 billion from $75 billion and another $75 billion of 28 day loans, doubling short-term loans to $300 billion.”

Even without the big bailout, these are impressive numbers. Has the dollar, as Spina puts it, “been sentenced to death?” It could remain strong against the euro or sterling, but at least vs. gold, that looks to be the way to bet.