Wednesday, January 04, 2006

 

Another Shining Day For Precious Metals

Market Watch reports on another big day for gold traders. "Gold futures stretched their winning streak to seven sessions Tuesday, tapping their highest intraday level in three weeks and marking their loftiest close since 1981. Gold for February delivery climbed to a session high of $533.20 an ounce on the New York Mercantile Exchange, a level not seen since Dec. 12 when prices reached $543, an intraday high last achieved nearly 25 years ago."

"The contract finished the session up $13.60 at $532.50 an ounce, the highest futures closing level since April 1981. 'The emergence of fund/investor buying today, rather than long liquidation that was seen 12 months ago, is positive for gold's short- as well as longer-term outlook,' said James Moore."

"Taken in this light, gold's December high will be 'coming into traders' sights soon, with the next major upside target being $550,' he said."

"March silver also gained ground to start the trading week, adding 27 cents to close at $9.16 an ounce after a $9.185 high, its loftiest intraday level since Dec. 12. 'There's a lot of upside left in the entire metals complex,' said Dale Doelling."

"The factors that drove gold up by more than $80 an ounce over 2005 remain intact, said Peter Grandich. The foremost of these, physical and investment demand, shows no sign of cooling down. 'The rapidly growing economies in China and India have been key and while soft patches are likely going forward, the enormous wealth creation ongoing there appears to assure strong demand for gold for the foreseeable future,' Grandich said."

"Silver prices also look strong in early January and are forecasted to break the key $10 level by mid-2006, Matthew Parry, an economist at Moody's said."

"In other metals trading, March palladium rose by $8.70 to close at $270.20 an ounce and April platinum added $2.80 to finish at $981.80 an ounce. Supplies of gold fell by 98 troy ounces to 6.66 million troy ounces, while silver inventories declined by 3,956 troy ounces to 119.9 million troy ounces."

"The benchmarks tracking metals-mining companies rallied along with the precious metals, taking one key index to its highest level on record. The Amex Gold Bugs Index moved up by 7.9% to end the session at 298.77 after setting an intraday record of 298.93. The Philadelphia Gold and Silver Index rallied to 136.1, up 6.3% at the close, and the CBOE Gold Index climbed to 128.26, up 7.2%. Both touched their highest levels in more than nine years."

Comments:
Ben,
What's your opinion about palladium?

It crashed in 2001 and has been flat since than, while other metals had significant gains over last 5 years. Platinum in particluar went up 100% since 2001. Palladium belongs to the same metal group and is used for the same things: jewelry and as autocatalyst: http://www.gfms.co.uk/Market%20Commentary/Platinum_Palladium_Current_Views.pdf

Do you think we may see a similar bull market in palladium?
 
I was trained in the practical uses of all the "precious" metals, Re, Ru, Os, Rh, Ir, Pd, Pt, Ag, and Au. Platinum, much like gold is inert, and has bullion value, aside from its uses in industry. Metals like ruthenium, rhodium and palladium are useful as catalysts in general and are increasing used in pharma as catalysts for making drugs. Last year's Nobel prize in chemistry went to guy who invented new uses for rutheniun. I can also tell you that there is intense effort to get cheaper metals like palladium to do some of the heavy lifting that rhodium and platinum does in the auto industry. If I were to wager on a precious metal it would be rhodium since it does everything. It has little value as bullion but is irreplacable as a catalysts in the industrial world. Does anybody out there know about companies which recycle precious metals?
 
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