|ORO Y PLATA INTERNACIONAL S.A.
Gold +14% on the Week; Wall Street
Regains Footing, Recovers Loss
On Wednesday gold rose the most in a single day in reaction to the stock
market slump, but at least for Wall Street that turmoil eased before
weekend in part due to a massive government bailout plan. In morning
trade today the Dow Jones Industrial average is up 1.1 percent for the
week to 11,326.97 points, after having hit a low point of 10,462 Thursday.
The Treasury Department announced today a Great Depression-era plan
to provide guarantees for U.S. money market mutual funds. The Securities
and Exchange Commission also temporarily banned the short-selling of
nearly 800 financial stocks.
Gold initially reacted to the mid-week Dow slide as a safe haven for
investors, but even with the government plan to save Wall Street, the metal
has held-up well. On the week gold is up 14 percent to $863.10oz as of
10:30 a.m. in New York. Platinum is down 4.6 percent to $1,125oz, and
silver is up 14.7 percent to $12.34oz.
GFMS: Strong Dynamics for Gold but Outlook Shaky for Platinum
Gold could rise to $950 an ounce by the end of year if central banks and
miners hold back sales, GFMS Ltd. predicted this week. Central bank sales
are expected to drop 46 percent and mining supplies are expected to
decline in 2008, GFMS contended. Demand for gold from investors
however would soar 38 percent to 778 metric tons, driven by purchases in
``We're expecting gold to stage a powerful rally in the fourth quarter,'' said
GFMS chairman Philip Klapwijk. There will be ``significant declines in
stocks, which compete with gold.''
``People are liquidating assets and trying to raise cash,'' Klapwijk said.
``Once the dust settles, we will see some allocation back into gold, and
gold will benefit.''
GFMS predicts gold production to drop 2.3 percent to 2,422 tons, or the
lowest since 1996. South Africa's output has already declined 16 percent
in 2008. Recycled gold would rise 9.3 percent. Gold for jewelry was
expected to rise 6 percent during second half to 1,184 tons, but annual
jewelry demand would fall 10 percent to 2,164 tons, led by a 16 percent
drop across North America and a 15 percent drop in India.
Platinum is expected to end the year with a surplus, and GFMS expects
that trend to explode in 2009 as demand from the automotive industry falls.
The market will likely post a surplus of 120,000 troy ounces in 2008. Paul
Walker, GFMS CEO, predicted global platinum demand would fall 4.4
percent to 7.34 million ounces. Platinum output was expected to hit 7.46
million ounces, and rebound in 2009.
Walker added that the record price run for platinum earlier this year was
driven by a projected deficit of 500,000 to 600,000 ounces, but analysts
failed to take into account the record price would reduce demand.
Platinum jewelry demand was dramatically reduced as the price rose,
GFMS found, and the group expects a 73 percent drop for 2008 to 1.1