Gold, Silver, Metal Prices: Commentary – 12/24/2009


Bullion update ... ‘Tis The Season To…Do Tally

Good Day,

‘Twas the Day before Christmas and all over the floor,
Not a trader was stirring – they all headed out the door.
The price tickers however, continued to…tick,
As the squaring of the books became everyone’s pick.

Two days after hitting seven-week lows near $1072, gold prices were once again trading (just) above the $1100 mark, amid thinning conditions, ahead of today’s early close. The dollar pared its earlier, profit-taking-induced losses, and was off by 0.26 on the trade-weighted index, at 77.67 as of the last check. US jobless claims fell by 28,000 and hit their lowest levels since September of 2008. Capital equipment orders rose in November, but new home sales cratered following the expiration of cash-for-cul-de-sacs programs.

New York spot bullion trading was showing gold at $1101.00 per ounce basis the bid, which translated into a $14 gain on the day. The yellow metal will likely end the abbreviated week with an about 1% loss. As we mentioned yesterday, all moves, in either direction, will be exaggerated by several orders of magnitude in the upcoming sessions.

In overnight action, a little bargain hunting was seen in India as wedding season continues through year’s end. Overall however, the country is set to have imported perhaps only 30 tonnes of bullion this month and locals are apparently holding out for $1K gold –so says the head of the Bombay Bullion Association, Mr. Suresh Hundia.

Skating on this market’s thin surface would be best left to the pros –however many of them are still at their screens. Silver was ahead by 18 cents at last check (quoted at $17.29) but platinum and palladium recorded hefty upward moves, with the former showing a $36 gain to $1455 and the latter adding $18 to $375 per ounce. An SEC verdict brought shares of proposed ETF Securities Platinum and Palladium trusts one step closer to final approval, and it lifted platinum and palladium prices to their highest in a week. Platinum, in fact, has not traded as high since the 4th of the month.

Since it is tally time, let’s see how good Santa has been. Very good, indeed. On a date-to-date basis, a gold position shows a 30% gain. Silver, on the other hand, shows a 68% gain for the same period — despite all of the attention that gold manages to still capture in the financial media. But, wait! There’s more! Platinum is ahead by 65% and palladium (told you so) is 205% higher than last Christmas. Finally, rhodium (told you so x 2) on a monthly average basis, is ahead by a whopping 218% from December of 2008. Repeat: gold is for keeping money, the white stuff is for making money.

Speaking of prices and of averages, here are some little "stocking stuffers" to keep in mind: At $1100 per ounce, gold is trading at a level that is 30% higher than its three-year average of $845 (funny how that number keeps popping up more often than not). The metal is also trading some 53% higher than its five-year average of $717 per ounce. Not to mention the fact that $1100 gold is 210% higher than the ten-year average of $522 an ounce.

Finally, consider the 35-year average of $395 — a number that $1100 gold is above by, by 278%. Don’t know about you, but the word ‘reversion to the mean’ (and let’s just take the most recent average of $845 as illustrative of the ‘crisis’ years) also keeps popping up once one does this little math exercise (unless of course, one is convinced of a ‘new era’).

The only thing we are convinced of is also a number: the number 10. As in, the allocation level of a core gold holding for one’s portfolio, come rain or shine, hail or snow. That’s one ‘present’ one can gift to themselves and keep under their tree of wealth, which should not be opened unless that tree is on fire.

To our millions of readers worldwide, on behalf of this scribe and the entire world-class crew at Kitco,

"Wealth stays with us a little moment if at all: only our characters are steadfast, not our gold."


Jon Nadler
Senior Analyst

Kitco Metals Inc.
North America 

Websites: and

For the latest news on US Mint coin sales, read Gold and Eagles Rise; Fractionals Sell Out.

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