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Column: Metals march higher

Breitinger

Precious metals advanced in trading this week, boosted by an announcement by the Federal Open Market Committee that suggested more economic stimulus may be on the way soon.

In the past, Fed action to stimulate the economy has often been interpreted as stoking inflation, causing the price of commodities, especially precious metals, to appreciate.

Silver led the way, climbing in all five trading sessions this week. Silver for September delivery gained $2.67 per ounce, trading at $30.68 on Friday morning. This one-week, 9.5 percent rally pushed prices to a three-month high.

Gold sparked higher alongside silver, rising $52 per ounce (+ 3.1 percent) to $1,675 on Friday. With gold prices still down 13 percent from their all-time high last September, some notable gold investors are seeing the current discount as a buying opportunity.

Platinum continued its meteoric rise from last week, pushed higher not only by Fed action, but also by ongoing conflict in South African mines. As a result of possible supply constraints and U.S. inflation, platinum has popped $164 per ounce (+ 11.7 percent) during the last two weeks, hitting $1,563 per ounce on Thursday.

Despite the optimistic response in the metals this week, some Fed watchers warn the meeting minutes were nearly a month old, and rosier economic news has been released in the interim. This has prompted some traders to suggest the Fed could back off from further stimulative measures, as the U.S. economy is looking increasingly self-sufficient.

Isaac causes frenzy

Orange-juice prices continued pressing higher this week, as Tropical Storm Isaac bore down on Florida. Although the storm could pass to the west of the United States’ largest orange producer, the threat of impact spooked consumers, producers and traders into buying orange juice before the storm hit.

Prices for frozen concentrated orange juice futures for September delivery reached a three-month high on Friday, near $1.41 per pound. As Floridians and orange-juice traders prepared for the weekend, all eyes remained fixed on the weather forecasts, waiting to see how the storm develops.

Opinions are solely the writer's. Walt Breitinger is president of Breitinger & Sons LLC, a commodity futures brokerage firm in Valparaiso. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.

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