Tuesday, September 14, 2010

Gold, Silver Spike Higher; Stocks Take Rare Hit

Ed. Note: Sometimes, like today, I think I should be writing as a satirist rather than as a junior economist.

Gold soared to record highs today for no particular reason. The yellow metal has been poised for a breakout since mid-summer. Today's move was in concert with another big jump in the price of silver, itself notching a 2 1/2-year high (the London fix was $20.92 on the 17th of March, 2008).

The move in the metals - especially silver - has probably been long overdue, a condition many assign to covert and overt manipulation of the precious metals markets by JP Morgan and other well-connected instruments of the fiat money cartel.

Whatever the reason, the precious metals have been consistently outperforming stocks. 2010 is no exception. Silver is up nearly 20% for the year. Gold is up a nifty 16% while the major stock indices are just barely positive for the year. Could it be that gold and silver are finally becoming more mainstream investment vehicles, regarded by many as not only a hedge against inflation but a true store of value in a world gone mad with hedges, derivatives, deficits, and all manner of opaque investments?

Should that turn out to be the case, expect this move to be only the beginning, as heightened awareness turns into heightened demand. Both have quadrupled in price over the past 10 years. The stock markets, meanwhile, have shown virtually no tangible return over the past decade.

While the metals were making clanging noises, stocks took their first decline (though the NASDAQ was higher at the close) since last Monday, breaking a four-day winning streak, even though the declines were minor.

Dow 10,526.49, -17.64 (0.17%)
NASDAQ 2,289.77, +4.06 (0.18%)
S&P 500 1,121.10, -0.80 (0.07%)
NYSE Composite 7,162.08, +5.90 (0.08%)

For the first time in the past five sessions, declining issues outpaced advancers, 3148-2517. New highs remained at elevated levels compared to new lows, 356-39. Volume was significantly higher on the NASDAQ, though the NYSE continued its regime of exceedingly low volume. Since stocks were mostly lower - especially after a lower open, bounce to multi-day highs and a late-day pullback - volume data could be considered a significant indicator and should be closely monitored near-term.

NASDAQ Volume 2,106,687,000.00
NYSE Volume 3,952,214,250

Crude oil took a back seat, losing 39 cents, to $76.80. Gold, as mentioned above, hit an all-time high of $1,269.70, up a whopping $24.60 (1.98%). Silver also was bid higher, finishing up 29 cents, to $20.40.

No comments: