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AIC INVESTMENT ADVISORS, INC.
440 South Street, Pittsfield, Massachusetts
(October 20, 1997) METALS: PRECIOUS METALS–Dollar gold prices were relatively stable during the third quarter. The London PM fix set a high of $333.70 per ounce at the start of July and recorded a low of $317.30 on July 9. Trading during August and September remained within this range. The gold price during August recorded a high of $327.70 and a low of $319.35 per ounce; September's PM fix recorded a high of $332.10 and a low of $320.45 per ounce. Monthly averages for the third quarter were $323.75, $324.13, and $322.76 per ounce for July, August and September, respectively.
October witnessed renewed activity in the gold market as news surfaced that India may be reintroducing gold into its monetary system for the purpose of “sucking up” unwanted U.S. Dollars. This news together with other factors (shortcovering by hedge fund managers) resulted in an increase in dollar gold prices of nearly $10 an ounce in October. The rising price was quickly meet by Australian producer hedging sales which had the effect of offsetting most of gain. The net effect was a more volatile trading environment for the precious metals early in the fourth quarter. The impression on the street, according to one dealer, is that higher gold prices may be sustainable and that gold could have turned the comer. However, lease rates on gold loans suggest that central bank activity is still prevalent to some extent, and this being the case, downward pressure on the gold price has resurfaced in mid-October.
Silver prices (Handy & Harman) averaged $4.36, $4.52 and $4.73 per ounce in July, August and September. The third quarter low of $4.22 was recorded on July 17 and a high of $5.21 was reached on September 30. During October, silver prices have retreated to the $5.11 per ounce level at this writing. Overall, the trend remains positive for silver.
Platinum prices (Mercantile Exchange) averaged $413.54, $424.21 and $425.83 per ounce during July, August and September, respectively.
Richard F. Maloney
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