Comex gold on Tuesday recovered from losses and rose to its highest price since trading near 15-year peaks in January, as investors continued buying bullion to insulate portfolios from worldwide tensions.
It was the seventh consecutive up day for gold. A rise in the euro brought speculative funds back as gold buyers after the lull, even as dealers said gold seemed to be de-coupling from the dollar as safe havens returned to favour.
"What's very interesting is that gold is now starting to move against all currencies, which could portend the start of the next leg of the bull (market) in gold," said Leonard Kaplan, president of Prospector Asset Management.
"Certainly the political risk and all the terrorism going on in the world is playing into it. But I tend to believe it's more than that," he said.
April gold rose to $420.80, last seen on January 15, before closing $2.40 higher at $420.00, up from a low at $415.60. Estimated volume was frantic 90,000 contracts, following even-heavier 101,278 contracts on Monday's $4.90 rise.
Open interest surged 18,067 lots on Monday, reflecting new buying. Spot gold rose to $419.40/0.15 from $417.00/7.50 late on Monday.
The London afternoon fix was $416.25. Gold bottomed near $388 on March 3 as funds liquidated long positions accumulated during its lengthy Bull Run in 2003.
It orbited $400 an ounce for days before taking off last week. The focus is returning to the 15-year high of $432.30 that was set on January 6.
May silver rose 8.0 cents to $7.708 an ounce, trading from $7.565 to $7.72. It reached a 16-year continuation high at $7.765 on Monday, while spot silver hit its highest price since investor Warren Buffett bought 130 million ounces in 1998, squeezing cash prices far above what futures were fetching at that time.
Spot closed at $7.67/69, up from $7.60/62 late on Monday. The fix was $7.54 an ounce. Nymex April platinum rose $17.40 to $914.40 an ounce.
Spot closed at $909.00/914.00. June palladium ended off 35 cents at $290.55 an ounce after hitting a contract high of $293.50 as speculators hunted opportunities across the precious metals complex. Spot was at $284.00/289.00.
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