Discussion in 'Freedom and Liberty' started by martin97, Jan 6, 2006.

  1. martin97

    martin97 Fuel busted Trucker. Founding Member

    Gold for February delivery closed at $541.20 an ounce on the New York Mercantile Exchange after touching an intraday high of $541.80. Prices haven't closed at a level this high since March 1981, though on an intraday basis, they touched $543 on Dec. 12 of last year.

    The contract finished up $13.40 for the session and up $22.30, or 4.3%, for the week. Prices fell $7.80 on Thursday after rallying by more than $40 over the previous eight sessions.

    China said Thursday that it would diversify its foreign-exchange reserves away from U.S. dollars and government bonds. See related story.

    "China's announcement of wanting to diversify their foreign-exchange reserves holdings is going to have a profound effect on financial markets worldwide," said Peter Grandich, editor of the Grandich Letter.

    "It's the death blow to the U.S. dollar, which had enjoyed a temporary reprieve in 2005, and another bullish factor for gold going forward," he said.

    Also, "disappointing U.S. employment numbers spooked the dollar, and in turn boosted gold prices on its traditional inverse relationship," said Matthew Parry, an economist at

    The dollar fell to its lowest against the yen Friday since mid-October. See Currencies.

    "Diversifying away from dollars has become desirable -- retail investors returned to the precious metals arena in droves this week," said Jon Nadler, an investment products analyst at bullion dealers

    "Low yields on cash and negative real interest rates are adding fuel to this quest for adding gold and silver to one's portfolio," he said.

    However, "it is still mostly the fundamental picture of sluggish supply and robust demand plus the prospects for weakness in the dollar that are the engines of this latest spike in prices."

    Bullish outlook

    Against this backdrop, the outlook for bullion is "very positive," analysts at Desjardins Securities said in a note to clients. "The main reason is that investment demand will continue to boost the gold price. Underlying nervousness with regard to the fundamentals for the U.S. dollar is underpinning investment in gold."'s Parry said gold prices will remain supported above $500 in 2006, reflecting a weakening in the dollar tied to slower tightening in monetary policy by the Federal Reserve as well as continued tensions in the Middle East.

    Analysts at Nacional Bank raised their forecasts for gold to $525 an ounce in 2006 and 2007 and $500 an ounce in 2008.

    Speculation that central banks in countries including China, South Africa and Argentina will increase the portion of gold held as reserves is also keeping gold above $500 and fueling gains in gold equities, they said.

    Most other metals were higher, with March silver closing up 30.1 cents at $9.173 an ounce -- up 3.2% for the week. January platinum ended at $1,004.60 an ounce, adding $13.10 for the session to close the week with a gain of 2.6%. March palladium rose $7.05 to close at $273.40 an ounce, up 4.4% from the week-ago close.

    Copper's March contract tacked on 2.55 cents to finish at $2.086 a pound. It gained 2.2% for the week.

    On the supply side, copper inventories rose 336 short tons to 7,762 short tons as of last Thursday, according to Nymex.

    Gold stocks were unchanged at 6.91 million troy ounces, while supplies of silver were unchanged at 120.6 million troy ounces.
  2. Valkman

    Valkman Knifemaker Moderator Emeritus Founding Member

    China's influence on everything is massive - the prices of steel and titanium are going up and up and they and India buy it all up.
  3. martin97

    martin97 Fuel busted Trucker. Founding Member

    Gold hits new 25-year peak at $550 per ounce

    NEW YORK (Reuters) - Gold rallied to hit a new 25-year peak on Monday as fund managers shifted more money into the metal on bullishness for 2006 and uncertainty about economic growth and the dollar, analysts said.

    Trading was volatile in Europe, with some speculative profit-taking emerging earlier, but a late flurry of fund buying in New York pushed bullion to a new high to reach above $550 an ounce for the first time since January 1981.

    Spot gold was last quoted at $548.50/549.25, compared with its intraday peak at $550.75 touched late in New York and against Friday's late quote of $538.30/9.00.

    The day's rally in gold -- an asset seen as an alternative to more common investments -- was unusual in that it coincided with the Dow Jones industrial average's first rise above 11,000 in 4-1/2 years, and with a firmer dollar in the afternoon.

    Fairly steady fund buying in gold, mixed with some dealer buying, helped power the market to its latest in a series of recent multiyear highs, said Andy Montano, a director at ScotiaMocatta in Toronto.

    "It seemed to be more a sentiment move than anything else and there didn't seem to be any significant interest in selling, and so the buying just kept taking it upwards and upwards," he said.

    "There seems to be some pretty good economic strength in the markets in general and that is giving rise, I would imagine, to some concerns over inflation."

    At its peak, gold was up more than 5 percent from a week ago, 18 percent from some two months earlier and 30 percent from a year ago. The price has more than doubled in five years.

    Market talk that China and other central banks in Asia -- which jointly have $2.6 trillion in foreign currency assets -- might be looking to diversify some of their reserves into gold had underpinned sentiment since late last year.

    China said on Thursday it planned to explore new ways of using the country's foreign exchange reserves and broadening their investment scope. It has 600 tonnes of gold in its reserves, accounting for only 1.2 percent of the total.

    Dealers said worries about rising energy costs and general security concerns in the Middle East had prompted funds and investors to diversify away from equities, currencies and bonds.

    "The market overall does look strong," said Frank Aburto, a broker at Rosenthal-Collins Group in New York. "I don't think it is going to collapse. Setbacks are an excuse to go into the market and go long, which is what the funds are doing at this point."


    Analysts said speculative positions in the U.S. market were high but had been stable for the past four to five weeks and there was no pressure on market players to liquidate.

    Stronger gold prices elevated mining shares in Australia, the world's second-largest bullion producer after South Africa, but physical buying fell in many parts of Asia.

    Newcrest Mining Ltd. (NCM.AX), Australia's biggest gold miner, rose as much as 5 percent and Lihir Gold Ltd. (LHG.AX) gained more than 6 percent.

    Numis Securities Limited lifted its 2006 forecast to $500 an ounce from $475 previously, in response to rapid rise in prices, buying by funds, inflation fears, falling mine output and rising production costs.

    Oil climbed to a three-month high, boosting gold's allure as an inflation-hedge, before being dragged lower in late trade. The dollar rebounded after last week's sell-off, as investors mull the future course of U.S. interest rates.

    Investors in Japan were absent due to a holiday but dealers and analysts noted fund buying from elsewhere in the region.

    In other precious metals, platinum crossed a psychologically important level of $1,000 an ounce. Spot was at $1,001/$1,005 from $993/$998 late on Friday.

    Palladium rose to $275/$280 an ounce from $267/$271. Silver was up at $9.20/9.23 an ounce, vs. New York's

  4. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Gold at 544 right now. Hasn't taken the Beating Silver has in the last 24 hours
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