Gold
Gold continues to push higher and took out resistance of $1,050/oz
yesterday and moved toward $1,060/oz before retreating slightly. With
investors continuing to allocate funds into the gold market, the next
target is likely to be an assault on the psychological $1,100/oz level.
Increasing concerns of a double dip recession and of the outlook for
major currencies is leading to continuing robust investment demand
(significant gold ETF demand in recent days). A period of profit taking
and correction is likely after the sharp moves up. Such a sell off will
likely be very sharp but would be expected to be shallow and previous
resistance at the $1,020/oz to $1,030/oz level would likely provide
support. Those calling gold a speculative bubble would do well to
adjust the gold price for inflation and into real terms and study the
history of bubbles. Bubbles and manias are when assets rise to
multiples of their former price. Today gold is less than half its real
price of nearly 30 years ago. It is one of the few asset classes to be
so undervalued on a historical basis. Gold is currently trading at
$1,053.10/oz.
Silver
Silver is shadowing gold’s progress and is currently $17.74/oz.
Platinum Group Metals
Platinum is currently trading at $1,334/oz, palladium is $315/oz and rhodium is $1,575/$1,75/oz.
