Although gold and silver have done well lately, in relation to agriculture and energy indexes they have not fared too well. In actuality, PM gains since August 2007 have been below average when one looks at the Goldman Sachs Commodities Index. Therefore, PM's have a long way to go in this move just to catch up to other commodities.
What seems to have detonated this latest move in commodities is the Chinese inflation numbers from earlier this week. Much of the inflationary rise, and rightly so, was attributed to food price increases. Funny though how food and energy never seem to be the inflationary drivers when calculated by western governments. It is quite ironic that data issued by Communist dictatorships is now considered more reliable than data issued by the supposed guardians of free markets.
Q4 results for Barrick and Goldcorp will be issued tomorrow morning. If they are surprisingly strong, all PM shares could get a very nice boost as funds and retail investors take notice.
Regards - VHF
