Despite gaining $20 on Thursday and another $10 per ounce on Friday, Hug was hesitant to say gold may have formed a new uptrend. Volume is still below average due from the recent holidays. He thinks the market had 80% to 85% of its regular traders back today.
Hug prefers to wait for the remaining volume to come back to the market next week. He thinks the spread between platinum and gold is interesting. Platinum recently traded with a $120 premium to gold, but that spread has rapidly risen to $180.
Although the white metal is much less liquid than gold, Hug suggested the spread has gotten ahead of itself and should soon revert back towards the $120 level.To take advantage, he said investors could go long gold futures and sell short platinum futures to benefit from the shrinking spread. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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