Source: Myra P. Saefong, CBS.MarketWatch.com
San Francisco— Gold futures closed at their highest level in more than two months Monday as rising political tensions raised investor interest in the precious metal for a sixth-straight session.
A rise in gold's "safe-haven" premium lifted the metal Monday as traders reacted to the killing of Hamas founder Sheikh Ahmed Yassin and Palestinians vowed reprisals, wrote James Moore, an analyst at TheBullionDesk.com in London.
Gold for April delivery closed at $417.60 an ounce on the New York Mercantile Exchange, up $4.90. The contract climbed all last week to add more than $17 an ounce.
"Uncertainty tends to play to gold's strength," said Grady Garrett, chief trading strategist at EnergyTrendAlert.com, a commodity information provider. The gold markets have been roiled by the "aftermath of the deadly Madrid bombing, the possible cornering of an al-Qaida bigwig and active terrorist bombings in Iraq on the one-year anniversary of the start of the war," he said.
With that in the backdrop, Garrett expects "any dollar-bearish events to generally be positive for gold."
The U.S. dollar retreated against its European rivals Monday, a reflection of global financial-market concerns after fresh violence in the Middle East. The retreat was supportive for gold, which is often seen as a safer bet in times of economic uncertainty.
All in all, this week is "likely to be just as choppy with terror alerts and other rumors keeping the metal in a nervous state while players keep a close eye on U.S. and European data for indications of mid-longer term currency trends," said Moore.
Silver higher again
Also on Nymex Monday, silver futures closed higher for a sixth straight session.
May silver rose 6.5 cents to close at $7.628 per ounce. Futures prices for the metal are trading at their highest level since 1988.
"The firm rate of GDP growth, weak dollar and super-low interest rates are really underpinning industrial commodities," said EnergyTrendAlert.com's Garrett.
But May copper fell back by 2.5 cents to end at $1.353 per pound. The contract touched $1.3985 earlier this month — that's at least an eight-year high for futures.
On the supply end, copper supplies were down 1,704 short tons at 224,936 short tons as of late Friday, according to Nymex.
An update on silver stocks wasn't available. As of late Thursday, silver stocks were down 13,563 troy ounces at 122.2 million troy ounces.
Gold inventories stood at 3.56 million troy ounces as of late Friday, down 303 troy ounces from the previous session.
Demand lifts platinum, palladium
In other Nymex trading, demand for platinum and palladium led prices for the metals higher Monday.
June palladium rose $12.90 an ounce to end the session at $290.90 an ounce, and the April contract for sister metal platinum climbed to $897 an ounce, up $7.
"Platinum demand is up 24 percent year over year and growing," said Kevin Kerr, editor of Kwest Market Edge.
Chinese demand for platinum surged 50 fold in the last year according to many reports, "so now they are turning to gold as a cheaper substitute," he said.
Platinum topped $900 this month and it could surge to $980 by July 2004, Kerr said. "Then we will likely see a significant pullback that we can sell into, maybe all the way down to $700," he said.
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