Weekend Commentary

Gold for June delivery rose $12.40 to close at $635.50 an ounce on the New York Mercantile Exchange, rebounding from a $12.90 pullback on Thursday. (This is about 48.86% gain from $426.90, the price on May 11 when we advised our readers to accumulate gold). Some are expecting it to touch $700 level.

The front-month contract for crude oil futures closed above $75 per barrel Friday for the first time ever in New York, scoring a gain of more than 6% for the week. The tight U.S. supplies of unleaded gasoline and tensions surrounding Iran's nuclear activities and violence in Nigeria are the key reasons behind such a run-up of the oil price.

In the bond market, long-term Treasury prices rose, sending yields lower. The benchmark 10-year note was up 4/32 at 95 31/32, with its yield at 5.01%.

After months of drifting up and down, Mortgage rates are now taking definite upward steps. According to Freddie Mac's weekly report, in this week ending Thursday, the benchmark 30-year loan approached a 4-year high.

The 30-year fixed mortgage reached 6.53%, up from 6.49% a week ago. This rate has not been this high since July 2002. A year ago, the loan averaged 5.80%. The 15-year fixed rate also moved up to 6.17% from 6.14% a week earlier. This is the highest it has been since June 2002. A year ago the 15-year averaged 5.36%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.16% this week, up from 6.13% last week. A year ago, the 5-year ARM averaged 5.22%. The 1-year Treasury-indexed ARMs averaged 5.63%, up from 5.61%. At this time last year, the one-year ARM averaged 4.26%.