Precious Metals

Gold rose to $917 at the mid-point of the Hong Kong session, but that would be the high for the day as it fell into the first hour in New York, then traded choppily through the rest of the day to finish at $913.30/oz., down $2.90. Overnight, gold is pushing higher.

Platinum moved progressively lower in the overseas markets, but really hit the wall just after New York opened, falling $20 in an hour before going flat for the rest of the day and ending at $1115, down $32. Overnight, platinum has edged higher.

Silver suffered a precipitous drop, from $14.03 in the far East to $13.67 at the New York open, but amazingly it nearly clawed its way back into the green by day’s end, closing at $13.94, down 5 cents. Overnight, silver is sharply higher. (Click here for charts)

Though platinum got slammed, gold and silver both eased only mildly yesterday, which would probably have been expected as oil backed off and, more importantly, the dollar rebounded against the euro.

“Gold prices eased as risk appetite made a comeback and was seen as a hunger for stocks and certain currencies,” wrote Kitco’s Jon Nadler. He noted that, “Demand from exchange-traded funds “has gone into drought mode since reaching a record high last month.”

True enough. Holdings of the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, went gangbusters through last month, reaching a record of almost 1,128 metric tons (36.27 million ounces) last month.

Since then the vaults have been lightened, so that now 1104 metric tons (35.5 million ounces) remain.

“The safe-haven play is becoming less relevant at the moment, largely because we are beginning to see more positive economic signals,” said David Wilson, an analyst at Société Générale in London.

But perceived positive economic signals, coupled with the precariousness of world politics, has many analysts thinking as gold bulls.

This week’s trade in gold is expected to progress in a generally higher direction, with prices potentially reaching $935.80 an ounce,” wrote Tom Pawlicki, of MF Global. “Support will come from worries that inflationary pressures are growing, from increased tensions in northwestern Pakistan, and from Venezuela’s seizure of oil assets.”