Gold and silver's rally into the end of the week and continued unrest in North Africa and the Middle East is expected to give precious metals a firm start for next week's trading.
The situation in Libya remains unsettled and so market analysts said precious metals prices will continue to add some risk premium even as gold and silver trade to new highs. A weakening U.S. dollar only adds sup
port to metals values, they mentioned.
Friday, April gold futures on the Comex division of the New York Mercantile Exchange settled at $1,428.60 an ounce, up 1.37% on the week, while May silver settled at $33.82 an ounce, up 4.266% on the week.
Going into the weekend precious metals are finding support because of the lingering unrest in Libya, said Mike Zarembski, futures analyst with optionsXpress. The markets will also watch for protests expected in Saudi Arabia and whether those escalate. With Saudi Arabia being the lead member of OPEC there are concerns about oil supply if anything happens to disrupt production. "They are the juggernaut," Zaremski said, adding that the risk premium in metals could grow and moves to safe-havens such as the Swiss Franc and U.S. Treasury bonds could occur if protests turn violent.
Adrian Day, president of Adrian Day Asset Management, said there's no real reason to sell metals here.
"Despite the market trading at record prices, I don't see any reason to sell here with everything that's going around in the world. Right now the Middle East, specifically Libya, has everyone's attention. With that kind of situation you don't want to sell. We don't know how it will unfold – you don't want chaos – but you don't know how things will develop," Day said.
Gold stumbled Thursday after European Central Bank President Trichet said the central bank may raise interest rates as early as April. On the surface higher interest rates are negative for precious metals, but Day pointed out that it's necessary to look at whether the level of real interest rates are rising. Further, it's important to see if the moves to tighten credit lag inflation, are concurrent with inflation or are steps to get ahead of inflation.
| Our basic needs are: Air, Water and Food. |
| Recent Articles By Arya : - |
No comments:
Post a Comment