Gold & Precious Metals Update
Comex gold raised the bar again as the yellow metal
reached fresh 18-year highs Thursday at the New York Mercantile Exchange while gains in silver followed close behind.
The rest of the complex however, including platinum and palladium, took a pause after reaching record highs on Wednesday.
The benchmark December gold contract settled up $7.80 at $486.90 an ounce.During the session the contract traded to a $487.80 high - its highest level since Dec. 29, 1987.
Bill O'Neill, a principal at LOGIC Advisors, said several bullish factors have been underpinning the gold market including a breakout technically, strong European and Asian buying as well as inflation concerns "lurking in the market."
"We are seeing (buying) interest across the board and gold is moving higher
in all major currencies not just the dollar," O'Neill said.
Amid the boldness of the recent rally, O'Neill said he raised his medium-term target for gold to $520-525 an ounce,
up from $485-$490 an ounce.
"These price levels could happen quickly. There might be some resistance around the $500 level but any dips will be bought," O'Neill said.
As gold has broken away from the dollar, O'Neill said tensions in France from recent riots and interest rate differentials are hitting the euro but lending support to gold and the dollar.
Other market sources said the World Gold Council's third quarter 2005 review on gold, released early Thursday, was also supportive to the market.
The Council said investment demand for gold rose by 56% in the third quarter and is on target to move higher in coming months.
The momentum in gold led the way for silver to settle higher.
The December contract reached an $8.140 an ounce high before settling at $8.102, up 10.0 cents on the day.
The platinum market took a pause from its recent record highs seen Wednesday and settled lower on the day. The most-active January contract closed the session down $7.30 at $982.40 an
ounce. During the session, traders said the market was taking a "pause" but would likely continue its climb towards the $1,000 psychological level. Despite the pull-back, traders said the technical chart remains positive and more upside momentum should be seen.
The Palladium December contract dipped to a $252.00 session low but later settled up 60 cents at $262.10 an ounce.
All indicators point to the Precious Metals continuing to move up.
