Gold Up, Crude Down

The world wide campaign to buy precious metals was propelled further this week as Europeans raced ahead of Americans and Asians trying to protect their wealth as they sold paper investments such as stocks, bonds, mortgages, and foreign currencies (especially the Euro currency).

European investors were especially concerned that Greece's debt problems would spread to other European nations such as Portugal and Spain and potentially cause the Euro currency to unravel. Gold and silver are perceived as a "safe haven" to store assets during times of financial or economic uncertainty, and this week's volatility in equities drove a new crowd of believers toward the yellow metal. June gold futures hit their all-time record high Friday morning at 1,249.70 per troy ounce.

Crude oil conversely dropped all week, plunging to a three month low on Friday, with nearby June crude touching $71.05 per barrel. The decline was related to excessive inventories and low industrial demand.

Many investors are now looking to natural gas as a cleaner, readily available "American" fuel. Interest in natural gas has piqued as enthusiasm for drilling for oil in our coastal waters has waned on environmental and national security concerns. Nearby June natural gas was trading at $4.32 per million Btus at noon on Friday.

In the agricultural sector, cattle, hogs, and grains fell along with the stock market. Soybean oil suffered the most, due to its relationship with crude oil and bio-diesel. Speculators are watching for any additional signs that China may be buying more U.S. corn as the demand from China could create a substantial price increase in the grain complex.