Firm oil prices on winter supply concerns, a cut in IMF global growth expectations from 4.3% at the end of September to 4% and the shortened Thanksgiving holiday week in the US has kept gold trading in a more orderly fashion today, between $446 and Friday’s high of $448. Interest has been steady all day with traders still taking short-term direction from the Dollar while with only durable goods and consumer sentiment data due for release this week there is likely to be little change to the broader economic picture following the weekend’s G20 and APEC summits.
It was all eyes on the currencies again at the end of last week as speculative positioning ahead of the weekends G20 summit in Berlin and Asia Pacific Economic Cooperation forum in Santiago led gold to another multi-year high, this weekend. Consolidation continued to be seen early Friday as gold slipped from Thursday’s close of $442.50 to reach $441.50 in Asian trade. Bids returned to the market soon after as the dollar continued its trend lower on views from the currency market that the US would ignore calls from other nations, particularly the Europe and Japan, to stem the dollar’s „rapid“ fall. Momentum picked up in the US session as the Yen broke through 103.40 against the dollar, a previous level for BoJ intervention. Gold tracked steadily higher across the COMEX session from its open of $443.75 but began to see fund profit taking between $445-7 before reaching a new 16-year high of $448. Book squaring pulled gold back to close the week at $446.75 and has traded $446-7 this morning as traders absorb the comments made at the weekend’s meetings. The main focus appears to be the G20 statement which referred to the US budget deficit, fluctuating oil prices, economic imbalances and „geo-political concerns,“ and US official’s rejection to denounce the dollar’s „volatile“ moves. The only mention of currencies was a recommendation that emerging Asian economies allow their exchange rates to become more flexible, which could prove positive for gold in the future with growing demand from the Asian nations, primarily India and China. With the three-US deficits widening, oil on the rise and the background geo-political noise FX analysts are now looking at €1.40 and Yen-90 in the coming months which will be mostly positive for US$ denominated gold. $450 still appears to be the markets target with $465 above that but with the RSI back at 71 as we edge nearer year-end the market is looking increasingly due a correction. Initial support should be found at $440 but I think we could see gold pull back to $425 before making further advances.
Silver mirrored the sideways moves by gold during European trade today, fixing at $7.615. Fund selling on the COMEX open has pressured silver back towards $7.53 but overall silver remains comfortable in the $7.50-65 trading area.
Silver lurked in the background on Friday as traders focused on the moves made by gold. Trade was kept to the $7.50-65 area seen over the past few sessions, closing the week at $7.58. Silver’s failure to successfully clear $7.65-70 suggest the metal is running out of steam but with gold and copper adding support a correction should find good underlying support around $7.30-35.
Platinum continues to test around the $850 level after dipping to $848 overnight and has fixed this afternoon at $853, up $1 from this morning. Palladium remains in a dull mood fixing this afternoon at $216, up $2 from this morning.
Platinum has continued in the mood we saw last week, whipping around in a volatile mood with spec interest on both sides of the market. On Thursday platinum tumbled from $872 to test support at $848 early Friday but tracked gold higher across the day, closing on the highs at $858. Consolidation this morning has seen the metal slip back to $848 but with the metal set to move into a supply surplus in the coming year we could see a correction back to $835 short-term. Palladium remains firmly back in the $210-20 trade range.
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