Gold Soars to New Record, Silver Nears $23

by CoinNews.net on October 5, 2010 · 0 comments

Bullion UpdateU.S. gold prices rallied above $1,340 an ounce on Tuesday, scoring a fresh record as the U.S. dollar tumbled near to a nine-month low against other world currencies.

Commodities jumped ahead as a group. Silver reached another fresh 30-year high as prices soared 3.2 percent to close just 26 cents shy of $23 an ounce. Platinum and palladium gained 1.7 percent and 3.0 percent, respectively. And oil hit a five-month high to near $83 a barrel.

U.S. stocks rallied as well. The major indexes surged between 1.7 and 2.4 percent, registering their best levels since May.

New York precious metals closing prices follow:

  • Gold for December delivery soared $23.50, or 1.8 percent, to close at $1,340.30 an ounce on the Comex in New York. It ranged from $1,313.30 to $1,342.60.

  • December silver surged 70.1 cents to $22.737 an ounce. It ranged between $21.810 and $22.770.

  • Platinum for January delivery jumped $28.60 to close at $1,700.70 an ounce. It ranged from $1,667.70 to $1,703.60.

  • Palladium for December delivery rallied $16.90 to $578.20 an ounce. It ranged between $556.10 and $579.75.

In notable bullion quotes of the day:

"Gold is rising as Johnny-come-lately people get into the market," Charles Nedoss, senior market strategist at Olympus Futures Inc., said and was quoted on MarketWatch. "People are starting to see gold as somewhat of a currency, particularly with the world flooded with cheap money," he added.

"When governments are in the business of printing money, gold is going to do well," Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago, said and was quoted on Bloomberg. "More quantitative easing is inevitable at this point for the U.S. The dollar is going to suffer, and gold is going to take out records along the way."

"You think that someone’s/anyone’s call for $2K gold is reliable?," noted Jon Nadler, senior analyst at Kitco Metals, Inc. "Perhaps it might be worth considering that which Kitco News’ Debbie Carlson brought to her readers yesterday: a Citigroup quick-take on the ‘reliability’ (more like the futility) of trying to prognosticate gold prices. Wrote Ms. Carlson:

"With gold making new highs, investors are looking for forecasts for gold prices following actions of gold miners, central bankers or chartists. None of them have been right in the past 40 years, said Citigroup Global Markets. "When gold miners had to buy back massive hedges, they proved we should not look to them for gold-price forecasting.

"The same applies to central banks, which sold right at the bottom. Bankers don’t get it right, either. Many famous forecasters (high-profile academics and high-profile chartists), after gold had fallen from a high of $875/oz to $600/oz in 1981, forecast it would soon shoot above $1000. Instead, it entered a 20-year slumber party," the bank wrote. "We now have popular forecasters (popular because they called sub-prime right) forecasting that gold is on its way to $4000/oz. It may well be. The history of unsuccessful forecasting shows it also may be on its way to $800/oz. And yet these high forecasts are no less popular than they were in 1981. As the famous saying goes, ‘It’s deja vu all over again’."

In PM London bullion, the benchmark gold Fix price was $1,330.50 an ounce for a gain of $17.00 from Monday. Silver was $22.240 an ounce, adding 21 cents. Platinum advanced $22.00 to settle at $1,689.00 an ounce. Palladium was $569.00 an ounce, rising $4.00.

U.S. Mint bullion American Silver Eagle coin sales advanced 165,000 on Monday and 25,000 on Tuesday, while the one-ounce American Gold Eagles gained 6,000 on Monday and remained unchanged on Tuesday.

The following are the latest October sales figures from the United States Mint.

U.S. Mint 2010 Bullion Coin Sales
October 2010 Totals
American Eagle Gold 1 oz 11,000 898,500
American Eagle Gold 1/2 oz 0 36,000
American Eagle Gold 1/4 oz 0 54,000
American Eagle Gold 1/10 oz 0 355,000
American Buffalo Gold 1 oz Sold Out 209,000
American Eagle Silver 1 oz 515,000 25,995,500

 

In coin news of the day, new images from the U.S. Mint reveal that the new five-ounce America the Beautiful Silver Bullion Coins have greater detail than the circulating quarters which share the same designs. For more information, read America the Beautiful Silver Coins Sharper Than Quarters.

Oil and gasoline prices

New York crude oil prices advanced Tuesday, "helped by a weaker U.S. dollar, bullish moves in global equities and hopes that the U.S. will soon follow Japan’s footsteps in expanding liquidity measures," wrote Claudia Assis of MarketWatch.

Crude for November delivery advanced $1.35, or 1.66 percent, to $82.82 a barrel.

"It’s all about the dollar," Stephen Schork, president of Schork Group Inc., a consulting company in Villanova, Pennsylvania, said and was cited on Bloomberg. "If you want to trade commodities right now, you have to follow the dollar’s movement. There’s a strong correlation. As currency goes higher, oil drops."

The national average for regular unleaded gasoline soared 1.4 cents to $2.732 a gallon, according to AAA fuel data. The price is 4.1 cents more than last week, 4.8 cents higher than a month back, and 27.1 cents above the price from a year ago.

U.S. Stocks

U.S. stocks rallied on Tuesday with the Bank of Japan cutting rates, expectations for monetary easing in the U.S., and increased service sector activity cited as major factors.

"The markets are feeling reassured after Japan’s move to ease monetary policy and the fact that the service sector, which accounts for 90% of our economic activity, is stronger than we were expecting," Jack Ablin, chief investment officer at Harris Private Bank was quoted on CNNMoney.com.

The Dow Jones industrial average rose 193.45 points, or 1.80 percent, to 10,944.72. The S&P 500 Index added 23.72 points, or 2.09 percent, to 1,160.75. The Nasdaq Composite Index advanced 55.31 points, or 2.36 percent, to 2,399.83.

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