Friday, July 14, 2006
'Scare Premium' Drive Up Gold And Oil
Nervous markets pushed up gold and oil today. "Gold rose to a six-week high as crude oil surpassed $78 a barrel for the first time as concern mounted over escalating violence in the Middle East. Crude oil for August delivery rose 30 cents, or 0.4 percent, to $77 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $78.40, the highest since trading began in 1983."
"Gasoline futures rose by 2.36 cents to settle at $2.3249 a gallon, the highest level since late September of last year, when U.S. refinery output was sharply curtailed by hurricane damage. In London, Brent crude futures gained 58 cents to settle at $77.27 a barrel on the ICE Futures exchange."
"'We've reached a level where we've put all the scare premium into the market that we can,' said James Cordier, president of Liberty Trading in Tampa, Fla. 'At this point, we have to have a disruption to move smartly higher from here.'"
"Gold for August delivery finished up $13.60 at $668.0 an ounce on the New York Mercantile Exchange, its highest closing level since May 23. The yellow metal gained 5.2% this week. 'The bonfire that the Middle East has now become has put the gold bullion into hyper-drive and gave the market a very strong close,' said Jon Nadler, an analyst at Kitco.com."
"'Fast approaching the $670 target, gold now stands poised to spring to $680 and $700 in short order, should any single geopolitical trouble spot erupt into a larger or more serious conflagration,' Nadler said."
"'With no sign of a let up in geo-political tensions and oil prices potentially looking to test $80 a barrel, I think there is now scope for gold to test $680,' said James Moore of TheBullionDesk.com."
"Other metals prices also posted gains. Silver added 4.50 cents at $11.530 an ounce and copper rose 3.60 cents at $3.7125 a pound. Platinum was up $3.50 at $1,267.50 an ounce and palladium settled up 45 cents at $334.50 an ounce."
"'Silver, platinum and palladium are industrial metals first, and are stores of value secondarily, if at all,' said Dennis Gartman in The Gartman Letter. 'Gold, however, remains the currency of choice during periods of political instability. It is such again.'"
"Richard Bernstein, chief investment strategist at Merrill Lynch, said that this week's flaring of violence around the world, especially in the Middle East and India, reinforced his expectation that global political instability will only grow in the future. 'It is unfortunate, but defense stocks (both in the US and Europe) and small gold positions still look attractive to us,' Bernstein said."
"Gasoline futures rose by 2.36 cents to settle at $2.3249 a gallon, the highest level since late September of last year, when U.S. refinery output was sharply curtailed by hurricane damage. In London, Brent crude futures gained 58 cents to settle at $77.27 a barrel on the ICE Futures exchange."
"'We've reached a level where we've put all the scare premium into the market that we can,' said James Cordier, president of Liberty Trading in Tampa, Fla. 'At this point, we have to have a disruption to move smartly higher from here.'"
"Gold for August delivery finished up $13.60 at $668.0 an ounce on the New York Mercantile Exchange, its highest closing level since May 23. The yellow metal gained 5.2% this week. 'The bonfire that the Middle East has now become has put the gold bullion into hyper-drive and gave the market a very strong close,' said Jon Nadler, an analyst at Kitco.com."
"'Fast approaching the $670 target, gold now stands poised to spring to $680 and $700 in short order, should any single geopolitical trouble spot erupt into a larger or more serious conflagration,' Nadler said."
"'With no sign of a let up in geo-political tensions and oil prices potentially looking to test $80 a barrel, I think there is now scope for gold to test $680,' said James Moore of TheBullionDesk.com."
"Other metals prices also posted gains. Silver added 4.50 cents at $11.530 an ounce and copper rose 3.60 cents at $3.7125 a pound. Platinum was up $3.50 at $1,267.50 an ounce and palladium settled up 45 cents at $334.50 an ounce."
"'Silver, platinum and palladium are industrial metals first, and are stores of value secondarily, if at all,' said Dennis Gartman in The Gartman Letter. 'Gold, however, remains the currency of choice during periods of political instability. It is such again.'"
"Richard Bernstein, chief investment strategist at Merrill Lynch, said that this week's flaring of violence around the world, especially in the Middle East and India, reinforced his expectation that global political instability will only grow in the future. 'It is unfortunate, but defense stocks (both in the US and Europe) and small gold positions still look attractive to us,' Bernstein said."
# posted by Ben Jones @ 2:32 PM 
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An incredible run for gold, after the June retreat. With all the news, I haven't been able to read the free-week technical reports at EWI, but I will try to post on that this weekend.
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