Wed, Oct 8 2008, 08:33 GMT
by James Moore
London, 08 October 2008 - Gold closed 2% higher yesterday amidst further safe-haven investment demand and the yellow metal has traded above $900/oz this morning to a one-week high. In additional the yellow metal has set fresh all-time highs in Aussy Dollar, Euro, Sterling and India Rupee this morning and is hovering close to record levels in Swiss Francs. The dollar finished lower yesterday with EUR/USD settling at 1.3950, and has weakened overnight ahead of data from the US showing Pending Home Sales for August. NYMEX crude futures settled at $90.06 yesterday but have dipped below £88/barrel overnight.
Gold continued to build on Mondays 4.5% gains yesterday, rising to $891.60 during US trade and closing up 2% at $885.40. The metal also set new all-time highs in Euro and Australian Dollar, which have been extended overnight after gold cleared $900/oz, with new highs also seen in India Rupees and Sterling. With equity markets hit by further turmoil and European finance ministers struggling to agree on how best to stabilize European markets investors look set to further increase their safe-haven holdings, suggesting gold should continue to test higher in the coming sessions, although credit market tightness will still leave the market vulnerable to bouts of cash generating profit taking. Gold should now look to challenge overhead technical resistance located at $909/918 and $927.

Silver traded to a high of $11.85 as gold hit its highs yesterday and posted modest gains this morning after closing at $11.46. The metal continues to hold above up-trend support line, and with momentum indicators turning higher and gold back above $900/oz silver could look to challenge the $13-14 area.

Platinum closed above $1000/oz yesterday after posting a high of $1018; however the white metal has run into renewed pressure overnight, dipping back to $950 amidst concerns of slowing demand from the auto sector. The bullish mood in both gold and silver should improve sentiment in the platinum market, however given the softer fundamental outlook and negative technical picture the metal may have to consolidate around the $960-1080 level.

Palladium posted a $10 range yesterday, closing at $196. Further support is seen at $190 with resistance above expected at $216.

Published on Wed, Oct 8 2008, 08:35 GMT
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