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METALS STOCKS
Gold futures rise; platinum posts strong gains
By Polya Lesova, MarketWatch
Last update: 4:26 p.m. EST Feb. 7, 2008Print E-mail RSS Disable Live Quotes
NEW YORK (MarketWatch) -- Gold and platinum futures posted strong gains Thursday, as the possibility of further supply shortages in South Africa boosted metals demand.
Gold for April delivery gained $5 to end at $910 an ounce on the New York Mercantile Exchange.
Platinum for April delivery soared $32.40 at $1,851.40 an ounce. Earlier, the contract hit an intraday high of $1,852 an ounce.
Severe power shortages in South Africa, the world's second-largest gold producer and the biggest platinum producer, are posing serious threats to mine production.
AngloGold Ashanti Ltd. (AU:anglogold ashanti ltd sponsored adr
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4:00pm 02/07/2008
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AU 38.57, -1.30, -3.3%) said Thursday that the power shortage currently facing the company will account for an estimated reduction in production of approximately 400,000 ounces of gold in 2008, assuming that a sustainable 90% power supply is achieved for the remainder of the year.
Gold trading was primarily driven Thursday by the news from AngloGold Ashanti, said Jon Nadler, senior analyst at Kitco Bullion Dealers, in a research note.
"The possibility of a wider or more prolonged loss of production is adding to gold's turnaround from its recent lows," Nadler said. "Ample above-ground stocks of the metal appear not to be persuasive to speculators at this time."
Gold trading has been volatile this week. On Wednesday, gold futures surged $14.70, or 1.6%, to end at $905, recovering from their decline of over $19 on Tuesday, when they ended at $890.30 an ounce.
"Another set of weak economic data" boosted gold prices on Thursday, said Zachary Oxman, a senior trader at Wisdom Financial.
"As we continue to get these reports that prove to investors that we are in fact in a recession, you should continue to see gold climb and the dollar fall," Oxman said. "I think this will be one of the major definable trends of 2008."
With few exceptions, it was a miserable start to 2008 for U.S. retailers. Many of the biggest names in the sector on Thursday posted January sales numbers that were even worse than already grim Wall Street forecasts.
In aggregate, January sales grew by 0.5% on a comparable store basis for U.S. chain stores, according to the International Council of Shopping Centers. Read full story.
Dollar surges
The dollar surged against the British pound sterling and was also up against the euro, after the Bank of England cut its benchmark a quarter point as expected and the European Central Bank held rates steady but issued a somewhat less hawkish statement. See Currencies.
The dollar index, which tracks the performance of the greenback against a basket of six major currencies, was at 76.701, up from 76.095 Wednesday.
"Gold has strengthened materially despite the dollar also being strong which again shows that gold's bull market is not simply a function of dollar weakness," said Mark O'Byrne, executive director at Gold & Silver Investments Ltd., in a research note.
"Increasing risk aversion is the order of the day and this can be seen in gold being well bid in the high $890's and in movements in currency markets," he said.
Also on Nymex, March silver surged 22.50 cents at $16.775 an ounce and March palladium rose $5 at $428.45 an ounce. March copper surged 14.50 cents, or more than 4%, at $3.4540 a pound.
Metals stocks mixed
Indexes tracking mining and metals shares were mixed Thursday. The Philadelphia Gold and Silver Index (XAU:phlx gold silver index capital-weight
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XAU 174.88, -0.08, 0.0%) edged down 0.1% at 174.88 points. The CBOE Gold Index (GOX:CBOE Gold Index
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GOX 180.88, +0.63, +0.4%) rose 0.4% at 180.88 points, while the Amex Gold Bugs Index (HUI:amex gold bugs index equal-$ weight
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4:51pm 02/07/2008
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HUI 428.45, -1.28, -0.3%) edged down 0.3% to 428.45 points.
As for the sector's exchange-traded funds, the StreetTracks Gold Trust ETF (GLD:streetTRACKS Gold Shares ETF
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GLD 89.85, +0.90, +1.0%) rose 1% at $89.85, the iShares Silver Trust ETF (SLV:ishares silver trust ishares
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3:59pm 02/07/2008
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SLV 166.70, +2.95, +1.8%) gained 1.8% at $166.70, while the Market Vectors-Gold Miners ETF (GDX:market vectors etf tr gold miner etf
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GDX 46.86, -0.04, -0.1%) declined 0.1% to $46.88.
Gold warehouse inventories declined by 809 troy ounces to stand at 7.6 million troy ounces as of late Wednesday, according to Nymex data. Silver stockpiles rose to 135.4 million troy ounces, up by 600,774 troy ounces, and copper |
