metals futures mark broad advance Metals futures mark broad...

metals futures mark broad advance Metals futures mark broad advance
Gold rallies; copper at record; silver at 18-year high
By Myra P. Saefong, MarketWatch
Last Update: 4:13 PM ET Jan. 25, 2006

SAN FRANCISCO (MarketWatch) -- Metals futures marked a broad advance Wednesday, with gold closing with an over $4-an-ounce gain, copper reaching a record level and silver and platinum prices tapping multi-year highs.

"The huge pool of global liquidity out there has not found a better place to rush into, and is enchanted with gold and its prospects," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.

And "the Far East and Europe have been leading the way on this run up, showing just how global this market is," said Julian Phillips, an analyst at GoldForecaster.com.

Gold for February delivery rose to a high of $566.90 an ounce on the New York Mercantile Exchange before closing at $562.50, up $4.40, or 0.8%.

From here, "unless the commitment to the metal has a long-term orientation, the air pockets that lie ahead will look and feel quite frightening," said Nadler.

"Current trading range is seen between $540 and $580 with the outside of the envelope at as wide as $490 to $600," he said, adding that "caution remains the operative word."

Indeed, Dale Doelling, chief market technician at Trends In Commodities, said he sees the fresh buying Wednesday as "highly suspect."

"Gold continues to suffer from an overbought condition and I'd advise only the bravest of traders to add to long positions at this juncture," he warned.

A retest of the recent lows around $540 seems to be the "most likely course," but if that happens, "it would set up an excellent entry point for new positions," he said.

There's a 60% to 70% chance that the market will "see some retracement in gold, as well as silver, before any new highs are achieved," he added.

Copper at record; other metals rally

Other metals trading on the exchange rallied along with gold, pulling copper futures to a new record.

March copper added 5.1 cents to close at $2.2035 a pound after touching a record of $2.204.

"Without any fresh bullish news, one has to assume that it is the funds and the weight of money that is once again pushing these prices higher," said William Adams, an analyst at BaseMetals.com.

March silver finished up 28.2 cents, or 3.1%, at $9.51 an ounce. It traded as high as $9.54, a level not seen since mid-1987.

With the break above the resistance mark of $9.30, "silver now looks to target the $9.50-$10 level with renewed momentum back in the market," said Peter Spina, an analyst at GoldForecaster.com.

April platinum closed at $1,064.80 an ounce, up $6.80, after touching another 26-year high of $1,068. Sister metal palladium saw its March contract tack on $7.80 to close at $283.90 an ounce.

On the supply side, inventories of copper were up 317 short tons at 9,180 short tons as of late Tuesday, according to Nymex. Gold inventories were unchanged at 7.17 million troy ounces. Silver supplies were at 122.8 million troy ounces, up 407,054 troy ounces.

Metals indexes climb

Benchmarks tracking shares of metals-mining companies climbed Tuesday, taking their lead from the broad strength among the metals futures.