Metals on a big run today...
METALS STOCKS
Gold, silver at multi-decade highs
Last Update: 12:33 PM ET Mar 30, 2006
SAN FRANCISCO (MarketWatch) -- Gold and silver futures struck fresh multi-decade highs Thursday, and copper set a record, as dollar weakness reignited the rally in commodities.
Gold's move "is a continuation of strong global demand aided by a glut of U.S. dollars in the world looking for a diversified asset class this is not deemed overvalued and provides the safety in an uncertain marketplace," said Peter Spina, an analyst at GoldSeek.com.
"Gold is clearly headed for $600, possibly even higher during the next several trading sessions," he said. "One should watch out for this market to quickly overheat, but more gains are likely first."
Gold for June delivery traded as high as $592 an ounce on the New York Mercantile Exchange, the loftiest level for a lead-month contract since January 1981. It was last up $9.20 at $587.80.
The dollar was last trading down 0.3% against the yen, as traders re-evaluated the Federal Reserve's statement following its policy meeting on Tuesday, at which it hiked rates and promised more increases to come. See Currencies.
"Anyone still not yet on board the secular bull market in precious metals are being left in the dust," said Peter Grandich, editor of the Grandich Letter.
"A coming crisis in the U.S. dollar will only add more steam to the engine," he said.
Gold also found support in safe-haven buying after Iran rejected a United Nations Security Council call to cease uranium enrichment, sending energy prices higher. Ministers representing five western governments will meet today in Berlin to discuss the next steps to be taken against Iran and its nuclear program. See Futures Movers.
Silver at new heights
Against this backdrop, silver for May delivery rose as high as $11.51 an ounce, its highest level in 22 years, and was last trading up 32.5 cents at $11.44 an ounce.
Silver has shot higher in the past several sessions amid excitement about an exchange-traded fund from Barclays that's expected to launch shortly.
The ETF will be backed up by physical supplies of silver, just as gold ETFS are backed up by bullion held in a vault. See related story.
"Investor interest is obviously quite strong, as both supply and potential demand numbers are factored in and warehouse stocks leave very little, if any, silver once the Barclays exchange product comes to market," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
But Dale Doelling, chief market technician at Trends In Commodities said he "expects a setback in silver after the ETF is launched."
Copper at all-time high
May copper also added 3.95 cents to $2.478 a pound, having earlier traded at a record $2.481 a pound.
"With the copper markets and some of the base metals seeing a positive flow of buying interest lately and the U.S. stock market hinting at even better economic conditions ahead, the overall environment for metals is supportive," said Nell Sloane, an analyst at NSFutures.com, in daily commentary.
And "seeing the copper market rise sharply into new high ground this week, means that silver is getting support from both gold and copper or in other words from the precious and industrial metals aspect," she said.
Copper got an added boost after Morgan Stanley increased its copper price forecast, predicting it will stay above $2 a pound until 2008.
"We could see the spot price move to the $2.60-2.80/lb range on a short-term basis," said analyst Wayne Atwell.
Elsewhere, July platinum rose $12.10 to $1,100 an ounce. The contract's high of $1,104.80, was a new record for a front month contract. It was also nearing the price record for any contract month, which was set at $1,189.50 on March 5, 1980, according to NYMEX data.
June palladium was up $10.60 at $348 an ounce following a rise to $355.80, a level not seen since late 2002.
Economists at Action Economics said the strong gains in base metals of the past several sessions had sparked a surge in demand from fund managers looking for asset classes offering higher returns.
Myra P. Saefong is a reporter for MarketWatch in San Francisco.
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