Gain in Two Decades
New York silver,
gold and platinum futures were on fire Wednesday
as the government’s takeover of American
International Group (AIG) and financial
uncertainty spurred investors away from Wall
Street and toward precious metals and oil. Gold
marked is biggest dollar gain in more than two
decades with a $70 rise.
October crude-oil jumped $2.35, or 2.6 percent,
to $93.50 per barrel.
December silver climbed an impressive $1.16, or
11 percent, to end at $11.68 an ounce.
October platinum gained $17.80, or 1.7 percent,
to close to $1,086.30 an ounce.
December gold rose sharply by 9 percent to close
to $850.50 an ounce.
"Tiny market such as gold’s only needed a
relatively small injection of buyers’ money to
make the type of move which we have been
witnessing today. As we wrote the other day, the
surprise was that it took so long to see a move
of this magnitude. We are waiting to see if
today represents the oft-predicted de-coupling
of gold from its primary reliable price-moving
(oil, dollar) agents," said senior analyst Jon
Nadler at Kitco Bullion Dealers.
"A sleepless night will follow for many a trader
and monetary authority. Let’s not use terms like
‘overbought’ or ‘oversold’ as they would have
little meaning to different values now seen in
various assets. Take the charts, crumple them
up. The psychology of investors is the only item
of significance as regards the next turn in
these markets," continued Nadler.
Gold generally follows oil’s direction and moves
opposite to the U.S. dollar, as a weakened
dollar encourages investors to buy gold, also
considered a hedge or safe-haven during times of
high inflation and economic uncertainty.