COMEX Gold Opens Above 7-Year High

Reuters ^ | 09-25-03

[Brian S]

Thu September 25, 2003 09:37 AM ET

NEW YORK (Reuters) - COMEX benchmark December gold futures GCZ3 surged $4.10 at the open Thursday to $392.50 an ounce, surpassing a seven-year high.

The previous high at $391.00 on a continuing contract basis was exceeded overnight, when December gold scaled a peak of $393.70. At 0833 EDT, gold was $4.00 higher at $392.40.

Gold rallied on a surprise output cut by the Organization of Petroleum Exporting Countries, effective Nov 1.

Analysts said higher oil prices could curtail the global economic recovery. Traders said gold investors were buying gold as an inflation hedge as well as a safe-haven asset amid geopolitical tensions.

[kinghorse]

Gold is surging because people around the world are predicting a calamitous event before Ramadan. Dollar should be correspondently weaker. My opinion.

[shrinkermd]

Remember, Gold OTC options expires Friday and Comex options expire today. Gold, gold derivatives and gold equities are such a small part of the market that manipulation, intentionally or unintentionally, is easy. Since most professionals are very short-term oriented, contrary to what they recommend to us, you have extreme volatility around expiration times.

[Blood of Tyrants]

If gold were such a great investment, why are there s many places SELLING it instead of holding on to it? That is, if the gold is so valuable, why do they want to trade it for my money?

[kinghorse]

I wish it was manipulation but the march to safety has been too steady to convince me this is options related.

[Indrid Cold]

Wellll, if they can buy it for $260/oz, like I can, then turn around and sell it to you for $392, then pretty soon we're talking real money. Granted, mine is an extreme case, but the precious metals refineries take as much as a 10% cut when you send in Aunt Bessie's bracelet for cash. Like so many other things, the money to be made in gold is not in the holding, it's in the trading.

[headsonpikes]

Yours is a good point - there are many hucksters out there adding little value while scooping fat margins.

OTOH, gold mining companies selling gold as fast as they can mine it makes good sense, as it would for any producer of commodities.

Gold is in a bull trend which seems likely to continue - it has barely started, imo.

[Blood of Tyrants]

You can buy it for $260/oz when the "market value" is $392? Man, I'm in the wrong business!

[Soren]

If gold were such a great investment, why are there s many places SELLING it instead of holding on to it?

Why do people always say this about gold? Why doesn't someone ever say "If IBM is such a great investment, why are so many people selling it instead of holding on to it?"

Gold dealers make a percentage off each sale. It's not like they own a huge hoard of gold that they are slowly selling off. They make a sale, pocket their cut, and buy more to replenish their inventory.

[Indrid Cold]

I'm a pawnbroker, but I suspect you'd find opportunities if you looked around. One local pawn chain that I'm aware of is only paying $1/oz. for silver, and that spot price is over $5/oz.

[Prolifeconservative]

If I'm not mistaken gold was around the 350's as the dow was rallying recently. Now, the dow is showing weakness and gold has rallied to a 7 year high.

Something is up.....what?

A seven year high in Gold isn't something to shrug off in my opinion. Is it just supply and demand, or does this rally in gold portend something calamitous.

I'm not a doom and gloomer and I really don't like to go negative......but I will say since the terrorist attack on this Nation, the rally in gold (and slight weakness in the Dow) appears to me to be just a little suspect.