Agoracom Blog

Commodities Catch Fire – Gold Up $42 To $906, Oil Up $7.45 To $112

Posted by AGORACOM at 12:19 PM on Monday, September 22nd, 2008

Oil is up on hopes that the bailout will stabilize the economy and bolster the kind of economic growth that will require more oil.

After hitting the SEC short wall on Friday, gold is resuming it’s rapid climb above $900 with a big $42 move as of 1:00 PM EST. Clearly, this is a flight to quality as investors fear US financial unknowns that can’t be masked by a ban on short selling.

However, more than just flight to quality, we also have the makings of a real supply demand issue.  If you missed my post of September 17th, here is an excerpt:

London-based researcher GFMS Ltd. states that Central Bank sales will drop 46 percent in 2008, while mine supply will decline for a third year.  Specifically, with respect to mine supply, global mine production will drop 2.3 percent this year to 2,422 tons, the lowest since 1996 That is going to put great pressure on an already string tight supply issue.


One Response to “Commodities Catch Fire – Gold Up $42 To $906, Oil Up $7.45 To $112”

  1. […] were you doing on and around September 15th 2008? I know gold moved from $780 to $906 in the following […]