Metals not affected by market collapse

Gold, silver and platinum enjoyed small run-ups in New York but nothing out of the ordinary, while base metals as recorded in London reacted hardly at all.

The commodity market reaction, according to trader Bill Richardson at BBN James Capel, was similar to events following the more severe stock market collapse in October, 1987.

“Then, as now, commodities did their own thing without too much regard for the stock market,” Richardson said.

While commodities continue to plod their own courses, reacting to a variety of supply and demand factors, Richardson said the stock market collapse gives one cause to look ahead, beyond the immediate future. In the longer term, he asked, is the collapse indicative or a warning of future economic troubles?

The stock market collapse started in earnest just before 3 p.m. on the Friday, shortly after the Commodity Exchange (Comex) in New York had closed for the weekend.

Chris Naylor, a trader with Guardian Trust in Toronto, said Friday had been a quiet day, and although the Dow industrial index on the New York Stock Exchange was down 50-60 points at the time of the Comex closing, nobody seemed overly concerned.

When the overseas markets re- opened Sunday night, gold, reacting to a lower U.S. dollar, moved up about $4.50(US) on a high volume, then eased back as the trading session wore on, closing up about $3.90 on the day. (In London, gold gained more than $5, with a Monday afternoon fix of $368.40.)

Silver and platinum also began the day higher before falling back; most of the volume was in gold, Naylor said. Trading volume in the precious metals slackened as the day progressed.

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