Silver has begun to run out in front of gold and PGM prices, becoming the leader rather than laggard in the precious metals space. As the PGM group of metals have grabbed all the headlines the last few weeks, the other white metal has slowly recouped losses from the last month and started into a strong up channel. Because of it's unique aspect of being a precious metal/monetary asset and a consumed industrial metal, we are reiterating our $15 price target in the next month and $18 per ounce target by the end of 2007.
The ECB halt to gold sales grabbed all the headlines at the end of last week and helped reinvigorate a market that was in need of some good news after weathering a serious influx of supply from the central bank sector. We'll have an update on Tuesday morning about last week's activity in the official sector. Hopefully we will see the resumption of a far lower selling level after a significant spike in sales over the past three months.
Labor talks are ready to begin next week in South Africa. The mining companies and unions are on nearly polar opposites of the spectrum to start the percentage increases to wages. This will be a very important development in the next few weeks as the current contracts are set to run out on June 30th. As the gold miners begin talks, the platinum labor unions have rejected the most recent offer for a wage increase. Should both gold and platinum production go offline mid-summer, we might not see our usual seasonal weakness to prices.
Prices should continue to bump around this morning as we wait for more economic data later in the week and additional commentary on the ECB announcement.
Blanchard and Company, Inc. is the largest and most respected retailer of American rare coins and precious metals in the United States, serving more than 450,000 people with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and platinum bullion. The Blanchard Economic Research Unit is a key source of precious metals market analysis and continues to be an important resource for financial and consumer media throughout the United States. Blanchard and its predecessor companies have called the New Orleans area home for more than 30 years. For more information about the company, visit www.BlanchardGold.com
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