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Gold at one month-low on dollar strength

Gold at one month-low on dollar strength < News < Bet On Markets

By Justin Brown Spot gold was lower on Friday afternoon and close to a one month-low as the US dollar remained strong against both the euro and the yen, analysts said. At 13h20 on Thursday, spot gold was quoted at $433.50/oz from Thursday’s New York close of $437.30/oz. The euro was last quoted at $1.3159 from late New York trade on Thursday of $1.3312 and the US dollar was quoted at 106.32 yen from late New York trade on Thursday of 104.68 yen. The precious metals complex still appears vulnerable to further long liquidation going into the year-end, London-based analysts for Barclays Capital wrote. Another test of support towards $430/oz appears very likely, Barclays Capital added. Gold appears to be basing above support between $431/oz and $433/oz and near term weakness remains a buying opportunity, as gold is likely to recover back to its recent 16-year at above $457/oz, investment bank JP Morgan said in a technical note. Medium-term, the ability to stay above $432/oz maintains the constructive outlook for gold as the breakout affirms the resumption of the bull market stretching back to 1999, JP Morgan added. Platinum was quoted at $830/oz, up $10/oz from its previous close of $820/oz, while palladium was quoted at $191.50/oz, down $3.50/oz from Thursday’s close of $195/oz. Further tests of platinum price support are likely in the short-term, but the metal is expected to find significant buying interest at current price levels, Barclays Capital said. Technically, platinum is probing the lower boundary of its multi-month trading range between $807/oz and $891/oz, JP Morgan wrote. Key support for the platinum price is likely to emerge between $805/oz and $807/oz, with a break through this area triggering a further decline toward $788/oz. On the other hand, resistance levels for platinum are seen at $842/oz, followed by $868/oz, JP Morgan said. Earlier on Friday, palladium touched $188/oz, the lowest level for the industrial metal since early January 2004, on continued long-liquidation in the metal as well as pressure from the metal’s bearish fundamentals. With a heavy palladium surplus forecast for the coming year, palladium could return to test the $150/oz level, UK-based analyst for James Moore wrote in a note. The next key support for palladium is between $182/oz and $187/oz, JP Morgan said in a technical note.

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