Gold reached as high as $1,140/oz in New York on Friday before closing marginally for the day at $1,134/oz but up over 1% on the week to maintain the positive technical action. It went as high as $1,138/oz so far in Asian trading this morning. Gold is currently trading at $1,137/oz and in euro and GBP terms, gold is trading at €831/oz and £748/oz respectively.

While equities in Asia were firm, European equities are more mixed this morning and appear to be giving up the early gains on hopes of economic recovery. Concerns about the European monetary union and the outlook for sovereign debt markets internationally should see gold remain firm until the outlook is less uncertain (see below).

Silver

Silver was up another 20 cents on Friday and surged 5% last week. It has range traded from $17.38/oz to $17.47/oz in Asia. Silver is currently trading at $17.45/oz, €12.76/oz and £11.49/oz.

Silver remains the laggard and has underperformed gold in recent months. This has changed in recent weeks with silver again beginning to outperform gold. The gold/silver ratio remains favourable to silver at 65 ($1,136/oz divided by $17.42/oz). "Poor man's gold" remains far from recent record highs ($21.34/oz on 27 March 2008 and long term record (nominal) highs near $50/oz in 1980.

Silver could be the surprise outperformer in 2010 as it was in 2009. Silver's industrial uses should mean that the gold/silver ratio will likely gradually regress to the average in the last 100 hundred years which is around 45:1. If the tiny silver market was to see real funds enter it than the ratio could return closer to the historical average of 15:1 as it did as recently as in 1968 and in 1980, this could result in silver surpassing its 1980 nominal high at $50/oz

Technically, a close above $19/oz and $19.46/oz should set us up for a move to challenge the record highs of March 2008.

Platinum Group Metals

Platinum is trading at $1,589/oz and palladium is currently trading at $479/oz. Rhodium is at $2,525/oz.

Courtesy: GoldCore.com

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