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London Bullion Report

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Precious metals rangebound as bill gains Senate approval

Thu, Oct 2 2008, 07:27 GMT
by James Moore

The Bullion Desk


London, 02 October 2008 - Consolidation was the main theme Wednesday as the precious complex carried out base building following Tuesdays sell-off. Traders have also been keeping a close eye on the newswires for further developments in the US rescue package, which gained Senate approval overnight, but still has to go before the House of Representatives. EUR/USD closed at 1.4003 and has dipped to 1.3911 this morning with economic data later in the day showing Jobless Claims for the week of September 27th and August Factory Orders. NYMEX crude futures for November closed down $2.11 at $98.53/barrel.

Gold opened in a steadier mood in Asia and soon settled into rangebound trade, working between $869-883.50. The metal staged a late rally in US trade, reaching a high at $893.30 before easing back to close at $882.25. The metal has again seen two-way trade so far this morning but short term gold is likely to remain in a softer mood as full approval of the US rescue package will no doubt boost the US dollar and investor risk appetite, while technical momentum indicators point lower after gold failed to hold above the 200-day MA. A failure to hold above $862 could see the metal trade back to the $840-45 area.

Gold

Silver recovered a good deal of the ground lost during Tuesday’s rout, trading briefly to $12.99 before closing at $12.67. Short-term the metal has been struggling to clear overhead resistance between $13.40-65, and a failure to hold above $12.65 could trigger a move back to $11.50.

Silver

Platinum rallied initially to $1050 in Asia yesterday before reversing course in Europe and posting a low of $1006 in early US trade. As with the rest of the complex trade this morning has been mixed after closing yesterday at $1034 and the metal should look to find further support at the $990 area, however the short to medium term outlook remains bearish as the metal remains in a down channel while momentum indicators are still pointing lower.

Platinum

Palladium closed $10 firmer yesterday, settling at $206. On the charts support is seen at $196/192 and below at $176 with resistance at $212/220.

Palladium


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