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London Bullion Report

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Financial market woes trigger upside push in gold & silver

Mon, Jul 14 2008, 09:22 GMT
by James Moore

The Bullion Desk


London, 14 July 2008 - With fresh highs in oil stoking inflation fears and credit liquidity & write-down fears triggering flight-to-safety demand from investors the precious metals closed with strong gains last week, with both gold and silver clearing key chart levels. NYMEX crude hit a record $147.27 and closed with a gain of $3.43 at $145.08/barrel. In addition SOS’s to the Fed/Treasury from Fannie Mae & Freddie Mac sent out fresh jitters about the health and stability of US mortgage & credit markets, lifting the Euro to 1.4946, just short of its all-time high of 1.5997. It’s a heavy week for US Economic data with the lone-up including June PPI & CPI, Retail Sales, Housing Starts and industrial Production, July Empire State Index & Philly Fed and the minute of the June 25th FOMC meeting.

The background of geo-political concerns and more bullish sentiment in oil lent good support to gold during Friday’s Asian session with the yellow metal holding comfortably above $940. Stronger demand from European traders led the metal to challenge key chart resistance at $953-55 with early buying from US traders triggering an upside break-out. The initial surge pushed gold to $962 with the metal posting a high of $966.70 later and closing at $959.60. After posting strong gains last week the yellow metal may look to carry out some consolidation at the start of this week, however the surge in ETF holdings reflects the level of concerns felt by investors while momentum should see gold continue higher. The previous $953-55 resistance level should now provide support, with chart resistance pegged at $974/985/992, although given the backdrop of record oil, rising tensions in the middle-east and deepening financial market woes we could soon see gold establish a base above $1000/oz.

Gold Price

The upside break-out by gold on Friday led silver to clear chart resistance at $18.55 & 18.75, hitting a high of $18.89. With investors seeking safe-haven assets to off-set geo-political tensions and rising inflation, clearance of resistance at $18.90 should see the metal work back to the $20 level.

Silver Price

Platinum closed with a gain of $48 Friday as a result of the rally in gold & silver. The white metal still has to overcome chart resistance at $2080/2110, however with chart momentum turning higher and more bullish sentiment in the other metals successful clearance should see platinum trade back to $2200.

Platinum Price

Palladium added $2 Friday, closing at $450. Further gains should find resistance around $456-8 with more substantial resistance still to be cleared at $472.

Palladium Price


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