Gold: May Break The Range Today
Gold is flirting with the upper end of its recent range this morning, awaiting existing-home sale numbers due at 10:00 a.m. EDT, which will be looked at for signs of economic slowing for the U.S. economy. Overnight, China’s growth numbers came in a little better than expected, but not strong enough to suggest that the Chinese economy has grabbed some legs. The overwhelming question remains one of global growth. Platinum is an interesting gauge to the success of global resurgence. Any suggestions, that the world will continue to spiral lower against a backdrop of disinflation will directly affect the consumption of the industrial metals. In fact, platinum recently dropped below the price of gold, but has managed a recovery to trade this morning at a mere $20 premium. If you believe that the global economies, with the aid of massive central bank liquidity injections, will begin to recover, you may want to look at platinum. For example, platinum maple leafs trade, on an all-in basis, just slightly higher than the American gold buffalo coin. Platinum coins are also in small supply. A global bounce suggests a higher return on a risk/reward basis. A deflationary spiral negates the argument. Can the world’s central banks liquefy a recovery? That’s the bet. |
