COMEX gold, silver push higher as stock markets dive
Monday July 15, 3:27 pm Eastern Time
NEW YORK - COMEX gold and silver futures rallied on Monday as world stock markets plummeted amid lost investor confidence and the U.S. dollar weakened against key currencies, drawing speculative buying in the safe-haven metals, dealers said.
Gold shot to a two-week peak and and silver hit its loftiest level in six weeks as the euro (EUR=) rose to one-for-one with the sagging dollar for the first time since February 2000.
"It is almost all equity- and dollar-based type action in gold today, the same old story," said Alaron Trading analyst David Meger. "The weaker dollar, with the September euro futures getting to parity today, and then the continuing break in equity markets was bringing this buying into the market."
Gold for August delivery (0#GC:) on the COMEX division of the New York Mercantile Exchange finished at $319.90 an ounce, a gain of $4, after ranging from $316 to $320.30, its highest since June 28.
Spot gold (XAU=) traded at $319.40/90, compared with Friday's New York close at $315.40/5.90, after fixing in London Monday afternoon at $319.
The euro surged above the psychologically important $1 level in a broad assault against the greenback as investors worried over the strength of the U.S. economy at the start of quarterly corporate earnings.
The weaker dollar makes commodities like gold priced in dollars cheaper for overseas buyers.
On Wall Street, the Dow Jones industrial average sank for the sixth straight session as the dollar fell and concerns lingered about more possible corporate misdeeds after multiple accounting scandals in recent weeks.
The Dow tumbled 3.7 percent in afternoon trading, down 318 points at 8,365. The Nasdaq and S&P 500 indices also fell.
With equities under pressure, investors were moving into precious metals as a capital preservation strategy, dealers have said.
"We expect the 10-day moving average (at $315, basis COMEX August) to hold the support below the market right now," said Meger. "Our initial target is the old failed trend-line which comes in at about $323, and a close back above that would be positive."
August gold hit 2-1/2 year highs above $330 an ounce five weeks ago.
In other metals, COMEX September silver (0#SI:) largely followed gold's move to close 5.3 cents higher at $5.118 and ounce, ranging $5.065-$5.155. Spot silver (XAG=) was at $5.08/10, versus its last close of $5.03/5.05. Spot silver fixed at $5.045 in London.
NYMEX October platinum futures (0#PL:) settled up $2.90 at $526.90 an ounce. Spot platinum (XPT=) was at $530/535.
September palladium (0#PA:) ended at $318 an ounce, off $1.50. Spot palladium (XPD=) fetched $315/325. |
