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Metals Rise as Europe Resolution Nears

Gold futures settled up 1.3 percent on Wednesday as the resolution to the European soveirgn debt crisis appears closer than ever. Anticipation that the dollar would rise against the euro in the

The same cannot be said of silver which is on a steeper ascent than it’s yellow counterpart. Silver has been battered this year, disparately trailing gold levels but investors appear to be regaining enthusiasm for the metal. Silver added 2.5 percent today and miner Silver Wheaton Corp.(SLW) was among the biggest gainers among all miners. For the month, the company is down close to 17 percent but an 11 percent improvement over the past 5 sessions has put them on the right track.

Platinum prices also ascended in recent trading, breaking a pattern that has sent contracts over 12 percent lower year-to-date. Platinum, like silver, has been the victim of a shoddy economic outlook and weak demand. The metals weakness throughout the year has left it extremely well priced, especially against the over inflated gold, meaning investors could be reconsidering an investment helping to drive up prices in the near future. Miners concentrated in platinum, like Stillwater Mining Company (SWC) are regaining strength, but the company remains down 46 percent for the most recent three month period.

At last check, the December contract for gold GC1Z was up $22 at $1,683 an ounce on the Comex division of the New York Mercantile Exchange. January platinum PL2F traded at $1,554.40 an ounce, up $35.60.

With the economic outlook and demand prospects still grim for platinum in the short term, platinum buyers are “adopting a wait-and-see approach before jumping into the platinum market,” said Norman. But “platinum supply remains tight relative to gold, with platinum annual supply amounting to only about 8% of total gold production” and above-ground platinum would last for about 1 year. (See story on gold-to-platinum ratio here.)

He said the metal is also among the 5 commodities least vulnerable to recession, according to Barclays analysts who recently ranked commodities by apparent vulnerability to global recession, based on such factors as recent price changes and leverage to emerging market demand. If prices can successfully rebound from the $1,500-$1,550 range, “industrial users such as auto makers and jewelry producers should emerge as buyers,” he said.


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