What is behind the latest rally in precious metals prices?
*MarketWatch, by Claudia Assis & Barbara Kollmeyer, Feb. 23, 2012:
'Gold futures rallied Thursday, boosted by a weaker dollar and
expectations that central banks will maintain loose monetary policies
for some time.
Gold for April delivery advanced $16.30, or 0.9%, to $1,788.20 an ounce
on the Comex division of the New York Mercantile Exchange, trading near
session highs.
A day earlier, the metal settled at $1,771.30 an ounce, the highest
since mid-November.''
''Gold last topped $1,800 an ounce in mid-September after hitting a
record $1,891.90 in late August.
Gold's move higher Wednesday 'was a reminder, if markets needed it,
that central banks are set to remain in accommodative mode for some
time to come,' said Michael Hewson, senior market analyst with CMC
Markets.
He said the dovish tone from the Bank of England on Wednesday, last
week's stimulus from the Bank of Japan and a new long-term refinancing
operation from the European Central Bank next week will increase money
supply and underpin gold prices 'for some time to come against most
[Group of 10] currencies.'
Upside targets: $1,800, then $2,000
'The key level on the upside lies at the November highs at $1,801 and
if we can push above here, then the record highs last year will come
back into view, with the likelihood we could well see levels above
$2,000 an ounce within the next 12 months,' said Hewson, in e-mailed
comments.''
''Gold futures also got a boost as the dollar fell versus most major
rivals.
A weaker dollar is beneficial for gold and other dollar-denominated
commodities as it makes them cheaper to holders of other currencies.
The dollar index, which compares the U.S. unit to a basket of six
currencies, fell to 78.083 from 79.207 on Wednesday.
The euro gained against the greenback after the Ifo Institute's gauge
of German business confidence rose more than forecast for February, and
the shared currency earlier broke through resistance at $1.33 to trade
above $1.3340, its highest against the dollar since mid-December.
Among other metals, copper for March delivery pared losses, down 2
cents, or 0.5%, to $3.81 a pound.
Silver tracked gold higher, with the March contract building on earlier
gains and rallying $1.20, or 3.5%, to 35.46 an ounce.
Palladium turned higher, with platinum adding to earlier gains.
Platinum has had steep recent gains on the back of a labor strike
called at a top mine in South Africa.
Platinum for April delivery rose $4.60, or 0.3%, to $1,725.40 an ounce.
March palladium rose $1.70, or 0.2%, to $719.45 an ounce.
Wednesday saw platinum's first settlement above $1,700 since late
September. For palladium, a settlement of $717.75 an ounce was its
highest in five months.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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