London Bullion Report

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Sentiment for gold remains bullish as traders await ECB/Payrolls
Thu, Jul 3 2008, 07:44 GMT
by James Moore
The Bullion Desk
London, 03 July 2008 - Gold is holding close to the 10-week highs set earlier this week, and looks set for a busy day ahead as the ECB meets to set European interest rates while US traders will be positioning themselves ahead of the long Independence Day weekend. EUR/USD is little changed from Wednesday’s close of 1.5888 with the ECB expected to raise interest rates 25-bp. Also scheduled for release today are June Non-Farm Payrolls, expected to show a decline of 40,000, the ISM Service Index and Jobless Claims for the week of June 28th. Oil prices have set a fresh record overnight with NYMEX crude for August trading to $144.57/barrel.
Gold was confined to a $3.50 range in Asia before drifting lower in early Europe as the dollar found support. Gold posted a low of $931.55 but was prevented from trading lower by good volumes of bargain hunter interest. The return of dollar weakness later in the day led gold back above $940/oz towards the close, posting a late high of $945.35 and settling at $943.20. Traders today will be paying close attention to both the ECB’s rate decision/statement as well as the US payrolls reading. A bullish reaction to either could see us target the chart highs from March/April around $953-55, although given the growing concerns over inflation and the return of ETF investment demand who added almost half-a-million ounces to the SPDR Fund yesterday, it looks as if a break higher towards the $990 level is only a matter of time.

Silver tracked gold to a low of $17.88 yesterday but firmed towards the end of the day, setting a high of $18.35 just before closing at $18.28. The industrial precious metal still has some overhead resistance between $18.30-55 to overcome, but given the strength across the commodity spectrum and the view that silver is a cheaper alternative to gold we would look for a push back towards $20 in the coming sessions.

Platinum managed a brief high of $2088 on the European opening yesterday but spent the remainder of the day between $2065-80 and closed at $2072. Although platinum still has to overcome chart resistance at $2080/2110 the metal should finding technical support from the 40 & 100-day MA’s ($2065/$2041) while tight fundamentals and the likelihood of further supply disruption will limit price weakness.

Palladium settled $2 lower yesterday at $464. The metal still has to overcome chart resistance at $472 but once cleared the metal should look to challenge resistance at $485/515.

Published on
Thu, Jul 3 2008, 07:46 GMT
Archive
- Precious metals consolidate as traders await payrolls reading
Published On Fri, Nov 6 2009, 08:55 GMT
- Gold holds gains as Fed maintains its stance
Published On Thu, Nov 5 2009, 09:53 GMT
- Gold set to extend gains
Published On Wed, Nov 4 2009, 09:32 GMT
- Gold tests higher on India purchase news
Published On Tue, Nov 3 2009, 09:34 GMT
- Precious metals open steady but could be weighed by equity pressure
Published On Mon, Nov 2 2009, 08:25 GMT
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