Gold futures are on a tear. According to the Wall Street Journal (subscription required), December gold futures rose $10.90 to close at $967.50 per ounce. Yesterday's high was $972.70, its highest mark since June 5.
The market moved up when buy stops were hit at $960 and $961.965 in the spot market and $963 on the Comex. A "buy stop" is an order to buy above the current price. Traders often place "buy stops" to test the upward momentum of the market or they use specific chart points that signal a turning point in the market. If the stops are hit it usually means that a trend is in place, in this case an uptrend.
Gold is now only 7% away from its 2008 high of $1,033.90 per ounce.
September silver rose 44.3 cents to $14.695 per ounce. Other precious metals followed suit. October platinum rose $37.10 to $1276.80 per ounce, The high was $1279.90 per ounce, its highest level since June 11. September Palladium was up $6.30 to $289.90 per ounce. Today's high was $282.00 per ounce
The metals rally followed the recent stock market rally and the recent downtrend in the U.S. dollar. There is an old adage: "dollar down, gold up." When the dollar gets weaker, traders hedge themselves by buying gold. Gold often follows oil, and oil also has been on the upswing lately.
Would you buy gold at these levels?
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