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London Bullion Report

Dollar weighs on gold & silver, palladium holds gains

Thu, Nov 6 2008, 07:30 GMT
by James Moore

The Bullion Desk  |  View company's profile


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London, 06 November 2008 - Mixed trade was seen in the precious complex Wednesday, with gold losing 2% following Tuesday’s gains while the more industrial metals pushed higher, with platinum buoyed by improved fundamentals as Anglo Platinum announced the closure of its Polokwane smelter. News of Obama’s victory in the US Presidential election prompted an initial bounce in the dollar however the greenback was put back under pressure in the latter part of the day with EUR/USD touching 1.3114. The Euro has slipped lower this morning ahead of the expected 50-bp rate cut by the ECB. Also for release today is data from the US showing Third Quarter Productivity and Jobless Claims for the week of October 31st. Crude oil ran into selling pressure towards Wednesday’s close with NYMEX futures finishing $5.23 lower at $65.30.

The dollar’s recovery in Asia and into early Europe led gold to drift lower Wednesday, consolidating initially back to $750 before sliding back $736.50 during US trade. The yellow metal settled at $742.50 but has drifted below $740 this morning as a result of the stronger dollar. Gold should look to carry out further consolidation above $720 short-term as markets continue to stabilize, however momentum indicators are still pointing higher, suggest a challenge of $779/784 once the $765 level is successfully cleared.

Gold

Despite the pressure on gold silver remained buoyant yesterday, rising to $10.59 shortly before the close and settling at $10.50. The metal has again stalled around the $10.55 level but indicators still suggest further gains with successful clearance enabling a test towards $11.20.

Silver

Platinum had a busy day Wednesday with the white metal posting an $87 range between $841-88 as the metal looked to the dollar as well as market fundamentals for direction. The disruptions to Anglo Platinum’s smelter again reflects the fine balance of market fundamentals and given that emissions are only likely to tighten, may serve to encourage buying interest from longer-term investors.

Platinum

Palladium gained a further $9 yesterday, settling at $217. Resistance above is expected at $222 and $234.

Palladium


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