New Surge Takes Platinum and Gold to New Highs

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The fact that ETFs for platinum, gold and silver are now available makes holding ‘physical' metal much easier. This brings an element into the market which just wasn't there in the past and can exacerbate upwards, and downwards, movements in metals prices, and hence market volatility.

Weakness in the US dollar which plunged to the lowest point against a basket of currencies since these figures have been kept in 1973, caused a corresponding upward push in the precious metals sector. Gold and platinum both achieved new highs, while silver ran up to its highest level since 1980. In the case of gold and silver, the correlation with the dollar fall is marked, Gold very much acts as a bellwether to the state of the US currency and tends to drag silver up with it.

The latest view of dollar weakness suggests that observers of the US economy remain uncertain as to whether the country will enter a negative growth phase (recession) and are convinced also that the credit crunch, triggered by the collapse of the house of cards otherwise known as the subprime mortgage sector, still has a way to run. While banks may not actually be brought down by the continuing write-offs on bad loans, this does tend to mean that credit will remain exceedingly tight, with the old adage that banks will only lend money to those who can demonstrate they don't actually need it becoming more fact than legend. This again will contribute to turning the screws on an already reeling domestic economy...

But among the precious metals it is platinum which has done the best of all, with the SA power factor taking its toll which in turn has led to a rise of a little under 50 percent this year alone.

While the continuing upward movement of platinum, gold and silver can still remain unpredictable, depending so much on investor sentiment. The fact that ETFS, available for all three meals, are now available, makes holding ‘physical' metal much easier and more available, brings an element into the market which just wasn't there in the past and can exacerbate upwards, and downwards, movements in metals prices, and hence market volatility.

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