Skip to main content

Resurging Metals Market Takes a Little Breather

Metals Bull Market Pauses Briefly

Most of this week has seen a raging bull market for spot prices and futures of all four of the precious metals we numismatists track. Gold has experienced a near $30 boost since Friday's London fix was posted, pushing up to about $925 as of this morning, with silver over $17.85 and platinum through the roof again at about $2165.

Analysts talk of a complete collapse of the U.S. dollar and subsequent crippling of the U.S. economy have, in part, spured on this buying frenzy. At the same time, and from some of the same elements, crude oil has climbed up to an unheard of $135 a barrel, virtually ensuring that the U.S. will soon experience in excess of $4.00 a gallon gasoline prices. At the same time, talk of a commodity market bubble is also circulating, giving pause to the bull run this morning.

Both oil and gold are seen as viable inflation hedges by the investment community. High level investors continually watch production levels, supply systems and consumer demand for key indicators. Their reactions to market developments in these areas and their anticipation of commodity market directions account for the major portion of the wild fluctuations seen in current spot prices.

Actual tonnage demand
for gold as a production element has dropped in the first quarter of 2008, as compared to the first quarter of 2007. The driving force behind the rise in spot metals prices is coming almost entirely from those seeking security from our sinking U.S. dollar.