Precious Metals

Gold traded lower for most of the day, but gained a little steam after the noon hour and finished on an up note at $812.80, down 90 cents. Overnight, gold has pushed higher.

Platinum traded within a $25 range all day, but closed at the high end of it at $1366/oz., up $21. Overnight, platinum is trending higher.

Silver was down until the late morning, but it too found buyers in the afternoon hours, and they propelled it back to even at $13.25/oz., up a penny. Overnight, silver is sharply higher.
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It was a blah day for the metals, with the dollar gaining and then falling, and crude slumping early before rallying back.

Julian Phillips, of goldforecaster.com, provided an in-depth look at what’s been happening in the market lately:

“Gold,” Phillips wrote, “bounced off strong support strongly today as we come to the close of the quiet season for gold and enter the main annual gold season in the final quarter of the year. Many U.S. players are also soon to wind up their holidays and return to the gold market. Indian physical buying has entered the market as a force taking up bargain pricing of gold as an early entry into their season for gold.

“The main driver of gold of late has been U.S. selling primarily from the speculative COMEX quarter, with investment demand showing uncertainty and as net sellers of small amounts. This left the field at the mercy of short-term traders who have pressed the metal down until this vigorous support was shown. Below $800 that support has been visibly resistant to these pressures, as we see in the bounce we are now witnessing …

“The malaise of the U.S. economy is by no means over as the I.M.F. itself is warning of a really big bank bust before long … [and] the credit crunch is getting worse.

“The U.S. consumer is not in a position to add to the inflationary pressures we are seeing in the wholesale numbers, so we would expect the Fed to allow inflation to go untended, relying on deflation in many quarters to dampen it. We expect the Fed to nurse already fragile growth instead.

“This translates into slower capital investment into the States from Asia and the Middle East and a continuation of the Trade deficit at unacceptable levels, leaving the $ to turn down shortly.

“Gold and silver are nearing the end of the savage correction they have endured. With silver the 'long shadow' of gold falling further on the decline we would expect it to outperform gold going forward, particularly as we see investment demand in that metal appearing ahead of that demand in gold.”