gold breached $318 an ounce

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    PRINCETON, New Jersey ­­ Cautious investors took profits after gold breached $318 an ounce yesterday, but bugs were undeterred and loaded up again to propel metal futures through $323.

    June COMEX futures pushed to their best levels since June 2000. Spot gold was last bid at $322.50, a gain of more than $5 and well up on the London afternoon gold fix that was set at $317.15. Spot silver was bid at $4.89, up 8 cents on the day, and well within range of the key $5 level. Silver is seeing its highest price in 15 months.

    Gold was initially torpedoed after news spread that the Russian central bank was intent on selling some of the country's rapidly accumulating gold and forex reserves. That pushed gold down to $315.10 before it was rescued be a statement clarifying the sales comment as referring only to currency holdings. Russia has been a steady bullion accumulator despite the trend amongst its European peers to shed gold reserves.

    The unprecedented volatility is expected to attract additional interest that will contribute to raising trading overall liquidity in physical stocks and derivative products, including equities and mutual funds.

    Spot gold is tipping into the October 1999 run which crippled Ashanti Gold and Cambior, two heavily hedged producers who were brought low by margin calls. The intraday peak so far is $323.90 an ounce. $325 is being eyed as a critical level which, of breached, is likely to trigger massive automated buy orders that will take the price up even further.

    Political and economic jitters are a solid foundation for the present gold run with fears of nuclear war and a terrorist radiation attack on Europe or the US the primary issues.

    Gold equities continued to run ahead, although they were somewhat subdued relative to smaller gains by the gold price in previous weeks. All the major indices set new intraday highs though:
 
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