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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (8880)	7/8/2004 11:07:29 AM
From: mishedlo	Respond to of 116555

COMEX gold, silver surge, funds pile in on dollar woes Thursday, July 8, 2004 2:50:31 PM NEW YORK, July 8 (Reuters) - COMEX gold surged to a 12-week high Thursday morning as commodity funds continued to buy amid worries about the dollar and recent data suggesting U.S. economic growth may be coming off the boil. August gold <0#GC:> reached $406.00 an ounce to mark its highest price since April 19, shortly after the open. At 9:54 a.m. EDT (1354 GMT), it was up $3.20 at $405.90, extending Wednesdays $9.70 rally after the technical break back above $400 an ounce. "Its the funds that are back in here," said a chief dealer at a bullion trading firm. "As long as this dollar stays surprisingly weak, I think this is going to continue to be bid." Gold has been choppy this week, trading down to $389 on Tuesday after skidding from its June 28 high at $405.60, which was only exceeded Thursday. Though a ways off still, Aprils 15-year peak at $433 is bound to be the next object of market discussion. It has mostly been moving in the opposite direction to the dollar, correlating closely with the euro, which slipped overnight but rallied back to its highest since mid-March at $1.2406 by mid-morning. Thin summer trading conditions are exacerbating the moves. The chief dealer said that one statistical measure of golds gyrations, implied options volatility, was up 1 percentage point over the last week to around 17.5 percent for one-month options. But Thursdays rally seemed to be self-perpetuating as speculators vied not to miss the move. Confidence in gold seemed to be revived by last weeks weaker-than-expected U.S. jobs figures which caught the market off guard two days after the Federal Reserve finally responded to the economic recovery by raising interest rates for the first time in four years, but only by a quarter of a percentage point. "I dont know whats sparking it," said a floor broker. "Remember, just a couple of days ago gold traded down to $389." He added, "Some people think the numbers are so soft that you are not going to be talking about a 50-basis point increase in interest rates soon. So that kind of induced people to start buying metals again." Spot gold <XAU=> was quoted at $405.25/406.00, up from the close at $402.00/2.75. Thursdays afternoon fix in London was $405.35. The September silver contract followed gold to set an 11-week high of $6.385 an ounce. It backtracked to $6.345 to show a gain of 22 cents. It posted an early low of $6.105. Spot silver <XAG=> fetched $6.30/33, up from $6.10/13 at the end of the previous New York session. The daily fix was $6.20. NYMEX October platinum <0#PL:> was up $14.10 at $805.00 an ounce. Spot <XPT=> fetched $806.00/811.00. September palladium <0#PA:> was off 90 cents at $225.00 an ounce. Spot <XPD=> was quoted at $222.00/227.00. fxstreet.com