Gold, Silver, Platinum Climb | Uranium Stays Unchanged

February 18, 2009 | By | Reply More

Gold

Gold’s climb continues as stocks fall and dollar rises.

Spot gold peaked at just over $973 an ounce in Wednesday’s European mid morning trading before falling back to $970 half an hour later.

The belief that the price of gold will move in the same direction as the price of oil and in the opposite direction to the dollar index now looks to be laid firmly to rest.

Fear that there is much more bad economic news to come and some considerable recent media coverage of the virtues of gold as a safe haven for investors has driven the price to heights not seen since last July.

Expect gold to take a breather as profits are taken off the table and then lets see if the price can be sustained above $970 until next week. If so $1000 an ounce will not be far away.

Silver

Silver has broken through the $14 an ounce to close in NY yesterday at $14.110 and has managed to put on another 10 cents in European morning trading today.

Silver is following gold as anxiety issues lead market players to focus on precious metals as the outlook in other stock market sectors remains inconclusive.

Platinum

Platinum carried on its recent rally to open up $20 an ounce in Europe this morning after last night’s NY close at $1087 an ounce.

Considering that platinum traded as high as $2300 an oz. in March last year and stayed above the $2000 level until July before plunging to near $700 an oz. by October before beginning its move out of the doldrums in January, its rise of $200 in little over a week is remarkable.

Our theory is that despite the travails of the auto industry and the high proportion of platinum that can be recycled over and over again, investors are looking at mining output dropping due to South African production and labour problems and anticipating a returning demand from auto makers as their stocks dwindle.

Other factor may simply be that with gold and silver looking strongly bullish, investors are thinking that, after the huge drop from its highs last year, this precious metal will reflect the same positive sentiment.

Uranium

The spot price of Uranium UX U308 price stays unchanged at US$47 a lb and there is little sign of any activity that might have a significant impact on this price.

The financial crisis has had its effect on the nuclear power industry and uranium. Major investors have bailed out of uranium producers who have also been hit rising costs and production stoppages.

There are also signs that countries proposing the construction of new nuclear plants are revising or postponing their plans as their economies suffer from the recession.

We can see no light at the end of this particular tunnel yet.

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