Silver Divorces Gold
infoseek.com
FOCUS - Silver hits 18-mth high, breaks with gold
10:50 a.m. Nov 21, 1997 Eastern
LONDON, Nov 21 (Reuters) - Silver dissolved its unofficial marriage with gold on Friday, striding to an 18-month high on the back of New York COMEX buying as its dull former partner refused to budge.
''The divorce is official and as the papers have come through, people have realised its link to gold doesn't matter,'' one London dealer said of silver.
Spot silver spiked to $5.45 an ounce at one point, its highest level since May 9, 1996, when it marked a session high of $5.46 an ounce bid.
Gold barely flickered, rising little more than 50 cents during silver's jump before dropping back below $304 an ounce to the narrow range it had kept until then.
Gold fixed at $303.90 an ounce in the afternoon, 50 cents up on the morning, as attention focused elsewhere.
Silver's rally, which has taken it from an October 28 session low of $4.65 an ounce, has gathered pace since Wednesday, when the metal rose briefly from $5.12 to $5.28 before settling mid-way between the two at the New York close.
Friday's rally, which began at 1346 GMT once New York trading had started, took silver through its previous high for the year of $5.40 from March 3, shattering intermediate resistances on the way.
Silver had been dragged to its late October low by the bearish sentiment in gold, which has been down to 12-1/2-year lows on the back of relentless rumours and news of central bank sales of reserve gold.
Silver's decisive break from gold means that supply fundamentals, and perhaps the fund buyers mentioned incessantly by dealers in recent weeks, have finally overcome the trading sentiment tying it to gold.
''It's pretty frantic at the moment and you don't get in the way of a runaway train. It went through resistance at $5.30 and people will logically target $5.50,'' said the dealer.
''Silver forwards have been tightening for some time and people have found it harder and harder to justify the link to gold,'' the dealer added.
The gold/silver ratio, a sometime trading tool of bullion dealers, was at 55.74 after the afternoon gold fix.
''Who cares about the ratios? People are not really trading the ratio now. If they are, they're mad,'' said the dealer.
Platinum was last at $393.50/$395.50, 50 cents up on its close, while palladium was at $210.00/$212.00, up a dollar.
-- Patrick Chalmers, London Newsroom +44 171 542 8057
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
It seems they are not quite divorced ... but in the seperation process.
Gold pessimism is dragging it down somewhat (IMHO) it seems, but
the current supply/demand deficit of silver, dictate a higher price soon.
Minimum ... US$10.00 in 1998. You are right to be patient.
But it shouldn't be much longer. |
