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London Bullion Report

Traders look to dollar ahead of payrolls

Fri, Nov 7 2008, 07:58 GMT
by James Moore

The Bullion Desk  |  View company's profile


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London, 07 November 2008 - Interest rates were the name of the game Thursday as the Bank of England surprised pundits by slashing its base rate 150-pts.
Meanwhile the ECB triggered a reversal in the Euro’s fortunes, announcing far tamer 50-pts. EUR/USD dipped to 1.2711 as a result of the cut and has lost further ground overnight, dipping to 1.2650 ahead of data showing US Non-Farm Payrolls for October.
The rebound in dollar sentiment weighed on commodities generally yesterday with NYMEX crude closing down $4.53 at $60.77.

Gold was confined to a $7 range for the early part of Thursday as traders sat on their hands ahead of the rate news. Reaction to the BoE news prompted an initial move to $748.80 while gold rallied to a high of $760.50 shortly after the US opening before running out of steam. A post fix sell-off caused gold to dip to a low of $729 before settling at $732.40. The yellow metal has been mixed so far this morning on the back of EUR/USD fluctuations and should look to carry out further base building above $720 in the coming session; however continued failure to clear the $768-74 level could trigger a dip back below $700.

Gold

Silver posted a 90-cent range yesterday, posting a high of $10.78 before falling sharply to $9.88 as gold came under pressure. The metal has been straddling the $10 level this morning after closing yesterday at $10.06 and continues to find short-term trend support, but as with gold the metal has been struggling for upwards traction, which could cause further stale liquidation.

Silver

Platinum saw another rollercoaster of a day, posting a $45 range and closing on the day’s low at $827.
The recent price consolidation has enabled the white metal to break out of the downtrend, held since breaking below $1900/oz in July, and suggests a challenge of the resistance band between $907-24.

Platinum

Palladium made further upside progress yesterday, rising to a 6-week high of $235. The metal was unable to hold its gains however, reversing to settle unchanged at $218. Further resistance is expected at $222 and $234.

Palladium


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