Gold Regains Some Lost Luster

Published on Tuesday, 31 January 2012 17:43 Written by Todd Shriber

New York, January 31^st (TradersHuddle.com) - Gold futures edged higher today and with January now in the books, it’s fair to say the yellow metal has started 2012 in stellar fashion. When the closing bell sounded today, the iShares Gold Trust (NYSE: IAU) and the SPDR Gold Shares (NYSE: GLD) could both say they are up at least 11.4% to start the New Year. Gold is back around seven-week highs and is off to its best annual start in three decades. Despite another down day for the iShares Silver Trust (NYSE: SLV), that ETF is up almost 20% in January as silver is off to best start in almost three decades, according to Bloomberg.

Even a stronger dollar could derail gold’s ascent today, though some analysts continue to speculate the yellow metal is ripe for a near-term pullback as some key chart indicators are signaling bullion is near-term overbought. On the other hand, GLD and IAU still rest almost 9% below their respective 52-week highs. Overall, January was the best month for gold since August 2011.

A pullback in gold prices would probably see faint support at $1,740 an ounce taken out with a retest of the psychologically important $1,700 an ounce level. That said, there are indications of Asian demand for gold is still robust. Combine that with any dollar retrenchment, and the environment could be supportive of higher gold prices.

The ETFS Physical Platinum Shares (NYSE: PPLT) endured a loss of 1.4%, the ETF’s worst one-day performance in a couple of weeks. Making that sting all the more was the fact that the retreat came on volume that was about 75% higher than the daily average. The laggard of the precious metals ETFs, the ETFS Physical Palladium Shares (NYSE: PALL) was once again slightly lower and it feels like this ETF has been in a slump for a week now.

Oddly enough, shares of North American Palladium (AMEX: PAL) jumped almost 6% on above average turnover a day after the company provided a positive update on the remaining drill results from its 2011 exploration program at the Company's Lac des Iles palladium mine in Northern Ontario.

Speaking of miners, that group of ETFs was unusually calm today. The Market Vectors Gold Miners ETF (NYSE: GDX) while the Global X Pure Gold Miners ETF (NYSE: GGGG) was barely higher. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) added almost 0.2% to finish January with a gain of over 20%. The Global X Silver Miners ETF (NYSE: SIL) was slightly lower on the day, but that should detract from a January rally of over 16%. The aforementioned quartet combined to make miners one of the best performing industry groups to start the year.