Gold
Gold has surged to new record nominal highs above $1.064/oz in trading
in Europe this morning. With the US Holiday yesterday gold traded in a
$10 range on Monday. In euro and GBP terms, gold is trading at €719/oz
and £675.86/oz respectively. Concerns regarding the dollar and rising
oil prices seem to be the impetus for gold’s new record highs today.
While the large COMEX positions may suggest a correction is likely, it
is important to note that open interest levels remain well below the
record 593,953 contracts seen in mid January 2008 (the gold open
interest on the COMEX rose 2326 contracts to 502,513 yesterday). Indeed
such open interest figures were seen for much of the final quarter of
2007 and the first half of 2008 (as seen in the excellent chart
featured in Le Metropole Café last night). Also, it is important to
note that the COT data is only one factor and not the sole factor in
price determination. Questions regarding the definition of commercial
shorts and as to whether the shorts may be hedging their positions
through unreported purchases elsewhere are worth considering. Large
physical buyers have many avenues to acquire bullion and do not have to
buy through the COMEX and take delivery (indeed few do).
Ratings agency Standard & Poor’s is now warning that the US will have to officially - and imminently - raise its federal debt limit to over its $12.1 trillion debt ceiling. This is leading to real concerns of monetary inflation and currency debasement.
Silver
Silver is currently trading at $17.86/oz, €12.09/oz and £11.36 and
looks as sound as gold from both a technical and fundamental basis.
Silver’s nominal high at $50/oz of 30 years ago remains a viable price
target in the coming years.
Platinum Group Metals
Platinum is trading at $1,348/oz and rhodium is trading at $1,750.
Palladium continues its strong run and is currently trading at $333/oz.
