New York bullion trading fired off a few more rounds of price-additive flares this morning as participants attempted to build on yesterday’s gains with equal fervor. Today’s list of buying excuses included European equity losses in the region’s financial sector, and yesterday’s poor reading in the Philly area’s factory index. Mirroring at least part of the gains in gold, the Swiss franc also continued to defy gravity for a third trading day and the country’s central bank was seen once again trying to hold back the inflow of frightened money before it does significant damage to its export-based economy.
Spot gold opened with a gain of $27.60 (about $27 lower than the overnight high, but no one appears to be counting…) and spot silver started off with a $1.12 per ounce rise to $41.76 while platinum trading opened with a $25 climb to $1,863.00 per ounce. Gold is once again running at or near parity and dueling with the noble metal in an occurrence almost as rare as Haley’s comet visit to the solar system. Palladium was the lone decliner this morning, shedding $2 to start Friday’s session at $750.00 the ounce.
In the background, the US dollar fell 0.48 on the trade-weighted index and it traded at 73.90 while crude oil lost less than half-a-percent but still threatened to break the $82 mark and perhaps aim toward the round figure below. Speculators have been pounding black gold hard for the past four weeks even as a majority of economists opine that the US will be able to avoid another recession and that the very fact that oil has become much less costly might be the catalyst that could trigger higher levels of growth in the country. There was a time when exponential gains lifted the commodity to $147 and prompted calls for more moonshots to come.
Exponential gains continued to remain the order of business in overnight gold trading in the overseas markets. At one point more than 3% was added to Thursday’s closing value in New York and the current 60-day tally is fast-approaching $330 worth of speculation-based gains. Last week’s attempt at a “correction” looks now, some $130 behind, like just so much of a shoelace-tying pause for a marathoner who ingested six vials of 5-Hour Energy and is still running up California Street’s steep hill.
Only this, right here, right now, is no San Franciscan hill; this runner might as well be urban climber Alain Robert, or Spiderman, scaling the golden-glass-laden façade of Trump Tower. It all comes down to whether the suction cups will hold before the top is reached – whatever floor number that might currently be thought to be found. One slip, one misstep, one downward glance, and the climber’s subsequent “experience” might be equally worth covering in the headlines of the financial markets of that day.
Not even one of the possible interpretations of the repatriation of Venezuela’s gold appeared to make a difference to this parabolic party. Analysts at Capital Economics suggested that the calling in of that country’s gold chips by ailing strongman Hugo Chavez is basically a precursor to the bullion to soon be sold as Venezuela is plum out of greenbacks. In that sense, and after suggesting that if there is no vault space to house the bars he would put them in the basement of his Presidential Palace, Mr. C came one step closer to the ultimate Marxist utterance on gold; that of using it to line certain bathroom fixtures…
At this juncture, one might (if they have not already done so) consider certain strategies via which their exposure to precious metals may be hedged. Sure, anyone who bought gold at, say, $900 might just let go of half of it and remain the owner of an equal-sized stash of “cost-free” bullion, but that’s another matter altogether. We are talking about low-cost insurance, such as Seeking Alpha’s contributor David Pinsen suggests herein. This, as given recent “developments” traders such as Zach Karabell (seen on CNBC’s “Fast Money”) warn that they do not like trades that are “a confluence of vast amounts of irrational emotions and panic about an uncertain future.”