Silver tops $36 an ounce, while gold returns to $1,500 an ounce
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Silver led precious metals to a modest recovery, and gold flirted with the $1,500-a-troy ounce level in Asian trading hours Monday, as investors tested the waters for price stability in a still-cautious market after commodities’ plunge last week.
Silver futures for July delivery SIN11 +3.82% rose 82 cents to $36.11 an ounce in electronic trading Monday after the metal skidded $2.63, or 1%, on Friday to complete its worst week in more than three decades. The metal was still down more than 25% so far in May.
June gold futures GCM11 +1.09% , meanwhile, rose $12.40 to $1,504 a troy ounce in electronic trading, extending its $10.20, or 0.7%, increase on Friday. Front-month platinum futures climbed $12.70 to $1,799.10 an ounce. Platinum and gold are both down more than 3% in the month to date.
“Precious metals will likely remain in focus following last week’s volatility. ... Aggressive traders may look for short-term long opportunities in silver,” said Ben Potter, markets strategist at IG Markets in Melbourne.
“The precious-metals complex may also be boosted by the political unrest over the weekend in Syria, Egypt and Bahrain,” Potter said.
Several protestors were reportedly killed in Syria over the weekend in clashes with government forces, while the Los Angeles Times reported 12 deaths in Egypt in the wake of violent riots between Muslims and Christians.
Monday’s recovery coincides with broadly higher regional markets in Asia, after a better-than-expected reading on U.S. nonfarm payrolls data for April helped push stocks on Wall Street higher Friday. Read Friday’s Market Snapshot.
Some analysts, however, said lofty valuations suggest that the decline in commodities may still have some distance to go.
“We think that the early May sell-off has recalibrated the markets to more reasonable, but still excessive, valuations. As a result, we suspect that there may be a little bit more to go on the downside before things start stabilizing,” analysts at MF Global wrote in their monthly commodity review for May, released over the weekend.
The analysts said they suspected that more evidence of a slowing global economic growth could come through in the months ahead as the impact of higher energy prices and rising interest rates in several countries around the world filter through.
