By Halia Pavliva
May 21 (Bloomberg) -- Precious metals have topped their moving averages and are heading into a reprise of gains seen almost a year earlier, according to Tom Pawlicki, an analyst at MF Global, and Andrew Chaveriat, a strategist at BNP Paribas.
“The precious metals markets are taking off again and their destination is July 2008,” Pawlicki said. “Inflows of investment from hedge funds and index funds as well as a weak dollar are reminiscent of conditions in first-half 2008.”
By May 7, the most-active gold, silver, platinum and palladium futures prices had all pushed higher than their 50-, 100- and 200-day moving averages. Only platinum fell back below the 50-day average for several sessions until surpassing them again this week.
“The fact that the key precious metals are above these moving averages suggests that the rebound in all these precious metals remains on track with more upside heading into this summer,” said New York-based Chaveriat, who projects price trends based on charts of past trading history.
“Silver can reach $16 an ounce by the end of summer, provided that the dollar continues to weaken,” Chicago-based Pawlicki said. “Platinum could reach $1,500 and palladium could see $300 over that same time frame.”
Gold prices jumped to a seven-week high in New York today, while silver, platinum and palladium also gained. The U.S. Dollar Index, a weighted basket that includes the currencies of six major trading partners, fell to a 2009 low.
Hedge-fund managers and other large speculators increased their net-long positions in gold futures by 6.8 percent and by 18 percent in silver contracts in the week ended May 12, according to data from the Commodity Futures Trading Commission. Net-long positions are bets prices will rise. Similar holdings in platinum futures rose 2.3 percent and jumped 16 percent in palladium, the CFTC figures show.
