Are Precious Metals Capped until after US Election?

Today’s AM fix was USD 1,767.00, EUR 1,362.80, and GBP 1,101.35 per ounce. Yesterday’s AM fix was USD 1,767.25, EUR 1,371.45 and GBP 1,103.29 per ounce.

Silver is trading at $33.96/oz., €26.27/oz. and £21.21/oz. Platinum is trading at $1,679.50/oz., palladium at $648.80/oz. and rhodium at $1,205/oz.

Gold edged up $4.60 or 0.26% in New York yesterday which saw gold close at $1,767.50. Silver climbed to a high of $34.33 and then fell off and finished with a marginal loss of 0.12%.

Gold has seen volatile and choppy trading overnight in Asia and in Europe this morning with the price being capped at $1,772/oz. and in a tight range between $1,767 and $1,772/oz.

Cross Currency Table – (Bloomberg)

Gold remains robust in euro terms at €1,364.50/oz. and remains less than only 1% away from new record highs in the single currency (see chart).

India and China are embarking on their peak consumption season which may create a boost to the physical market.

The far from resolved debt crisis in Greece, Spain and most countries in the western world means that this is another correction and investors and store of wealth buyers should continue to accumulate on the dip.

Prices may remain contained until after the US election but we expect that soon after the election (we expect Obama to be re-elected), precious metal prices will again surge. Indeed, from November into the early months of 2013, we could see one of the largest upward price movements in gold and silver so far in their bull markets.

US election years tend to see gold underperform vis-à-vis other years and this was seen in 2004 (+4.7%) and 2008 (+5%) when gold saw only marginal gains compared to the 17% annualized dollar returns seen in that decade.

Post-election years saw stronger gains – with a 22% in 2005 and a 25% return in 2009.

Page 1 of 7 >>
Comments
comments powered by Disqus

Market Data

Sponsored By:
Check out Resource Investor - Polls on LockerDome on LockerDome