Precious Metals

After being somewhat indecisive before mid-morning in New York yesterday, gold suddenly shot higher, pushing to $917, then held near $900 through the COMEX but was beaten all the way down to $840 on the Globex before regaining its footing to finish at $852.00, down $10.90. Overnight, gold has drifted lower.

Platinum’s moment in the sun turned to shade after it rose to $1180 in Hong Kong and was at $1140 as late as mid-morning, but slumped from there to give back some of Wednesday’s gains and end at $1081/oz., down $36. Overnight, platinum has been trending higher.

Silver touched $13 in London and was still close to the mark near the end of the COMEX session, but it too got slammed in the Globex, shoved back to a close at $11.93/oz., down 13 cents. Overnight, silver has pushed higher.

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It was a day of wild swings in both the equities and metals markets, with the former reaping late day benefits and the latter take a late hit to the chin.

That gold and silver held up as well as they did is probably a good sign, given that the dollar got a breath of new life, crude pulled back after breaching the $100 level, and equities got another big dead cat bounce.

Despite the gyrations on the COMEX and Globex, which are exchanges on which paper gold is traded, demand for physical bullion and coins persists at very high levels, a situation that will serve to underpin spot long-term, regardless of short-term fluctuations.

“People are panicking right now,” said Wall Street gold dealer Jules Karp, who sources coins for clients of the Street’s largest banks. “They're afraid for their money,” Karp added, calling demand “unbelievable.”

It’s the same elsewhere. New Orleans-based Blanchard and Co., the largest U.S. precious-metal retailer, reports that gold sales to new clients have jumped more than sixfold in the past three days.

“People are looking for answers,” said David Beahm, a vice president at Blanchard. “People want to protect their wealth and their assets, and gold is the best way for them to do that.”

That’s a trend in motion for sure. Gold aficionados have proven correct that “an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system,” wrote Citigroup analyst John Hill, and he added that, “Frankly, we're surprised that gold is not already at $2,000 per ounce.”