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London Bullion Report

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Precious metals slide with commodities on risk reduction & dollar strength

Fri, Oct 3 2008, 07:42 GMT
by James Moore

The Bullion Desk


London, 03 October 2008 - Selling was seen across the commodity spectrum yesterday with the CRB & GSC Indexes losing around 4.5% as dollar strength, record borrowing rates and risk reduction prompted fund and investor liquidation. NYMEX crude futures finished down $4.56 at $93.97/barrel and have weakened further overnight, trading below $93/barrel. EUR/USD traded as low as 1.3743 yesterday following the ECB rate announcement and is likely to remain in a volatile mood today ahead of key economic data showing Non-Farm Payrolls for September and the ISM Service Index.

Gold traded as low $829.50 yesterday as the metal ran into heavy selling pressure during US trade, triggering stop loss orders around $862 and $848. The yellow metal closed at $842.50 and has seen mixed trade this morning, working between $830-45 however the day ahead is likely to be extremely volatile with traders again keeping a close eye on the dollar, although a sharp fall in payrolls could see the greenback reverse some of its recent gains, giving gold an end of week boost. Chart indicators still show negative momentum, with a failure to hold the $830 level likely to see gold testing $820/818/805.

Gold

Silvers more volatile nature was again witnessed yesterday with the industrial precious metal falling over $1.50 by the close, settling at $11.13. The metal has traded as low as $10.78 this morning and could look to re-test the lows of September 11th at $11.25.

Silver

Platinum lost a further 5% yesterday as a result of dollar strength and weak US auto sales. Selling from OTC and TOCOM players overnight has forced the metal to a low of $946, but with the charts showing the metal still within a down channel, and with metal supplies increasing and demand slowing we could see the slide continue, potentially bringing the metal back to parity with gold.

Platinum

Palladium finished $8 lower yesterday at $198 and has dipped to $190/oz this morning. On the charts support is seen at $196/192 and below at $176 with resistance at $212/220.

Palladium


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