Gold was lower overseas, dropping below $840 at the London open and again just before New York opened on Tuesday, but it edged higher to the noon hour, then really took off, peaking at $870 in early Globex trading before easing to finish at $864.60/oz., up $6.30. Overnight, gold has been flat.

Platinum also pushed higher through the Comex and Globex trading, ending just off its intraday high at $961/oz., up $18. Overnight, platinum is sharply higher.

Silver was stuck around $10.90 until New York opened, then a rally ignited that drove it to $11.50 before it back off slightly to close at $11.44/oz., up 22 cents. Overnight, silver is trending lower. (Click here for charts)

The precious metals all had reasonably strong days, especially considering the mixed support from the usual suspects, as equities moved higher, but crude slipped and the dollar moved higher against the euro despite losing most of its early gains.

The smart money seems to be betting that the dollar’s rally is about to stall, and that’s gold-positive.

Thus yesterday, “Gold turned when the dollar started to weaken,” said Frank McGhee, of Integrated Brokerage Services in Chicago. “The additional amount of money that’s sloshing around the financial system will weaken the dollar.”

That’s a long-term trend. The U.S. government has pledged more than $8.5 trillion to bail out financial companies and help the country recover from a recession, and the president-elect has admitted that we’d better find a way to accept trillion dollar deficits for years to come.

McGhee also called attention to a technical development that had traders turning more bullish on gold. “Gold touched the 200-day moving average and didn’t fall apart,” McGhee said.

Still, not everyone is buying in. For example, Société Générale predicted gold will average only $650 an ounce this year, more than $200 below its average for 2007.

“Deleveraging in the first half of this year will keep gold under some pressure and rallies may be false dawns,” analysts at Société Générale wrote.

Source: Precious Metals Advance

Last 5 posts by Doug Casey

• Resource Stock Roundup:Monday, July 27, 2009 - July 27th, 2009
• Base Metals Higher - July 27th, 2009
• Crude Continues to Climb - July 27th, 2009
• Dollar Moves Lower - July 27th, 2009
• Gold Pushes Through $950 - July 27th, 2009