Money and Metals

MarketWatch reports on the fast moving gold market. "Gold futures tapped $600 an ounce Thursday morning for the first time since January 1981, pulling other metals to multiyear pinnacles and delivering copper to a new all-time high. 'Gold is exploding, and silver isn't far behind,' said Kevin Kerr."

"Gold for June delivery rose to $600 an ounce in regular trading on the New York Mercantile Exchange, having hit a high of $601.90 overnight. The contract was last traded at $597, up $5.30. May silver also traded at a new 22-year high of $12.01 an ounce, after peaking at $12.08 overnight. The contract was last up 22.5 cents at $11.93."

"'Key resistance was broken overnight and, as we have been building support and healthy consolidation over the last week or so, now we have a firm base to move higher,' said Kerr, who noted that Thursday's early rally has come without any real news to drive it."

"On the other hand, the break through $600 may also trigger a range of stops and key hedge-fund buy levels, said Kerr. 'Trading in the pits will be volatile today, to say the least, as traders and fund managers scramble for cover, at least those who are short,' he said. 'Those who are long will be scrambling to buy whatever they can to add to their winning positions.'"

"After the $600-$625 level, there may be a consolidation, perhaps back to $575, warned Peter Spina, an analyst at GoldSeek.com. Then from here, 'it is $650-700, ultimately,' he said, with $690-700 possibly the next upside target. 'Then it's onwards to over $800 ($825-875).'"

"Silver may see a correction that brings '$10 back, but then we look for $15 followed by $20-25, which is likely a year or so off,' said Spina."

"July platinum rose $14.40 to $1,095 an ounce. June palladium was up $14.85 at $357.50 an ounce after a $361.75 high, a level the futures market hasn't seen since mid-2002."

"Meanwhile, indexes tracking stocks in the metals-mining sector moved higher Thursday, on track to mark a fourth straight winning session.
The Amex Gold Bugs Index (HUI) rose to an all-time high of 354.32. It was last up 1.5% to trade at 353.25. 'The move on the HUI today above 350 is significant as it portends the move in gold to and past $600,' said Spina. 'The key for today is to close above 350 on the HUI and all indications are that it will accomplish this unless we have a significant pullback in the gold price,' he said."