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London Bullion Report

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Gold mixed but sees increase in ETF demand, PGM's fall in Asia

Thu, Nov 20 2008, 08:58 GMT
by James Moore

The Bullion Desk


London, 20 November 2008 - Trading conditions remain choppy in the precious complex with gold and silver jumping in late trade yesterday while the PGM’s have run into selling pressure overnight as recessionary fears hit equity sentiment. Equity market weakness led the Dow to lose 5% yesterday and follow through selling has spilled over into Asia with the Nikkei falling 6.9% and the Hang Seng 5.5%. The Euro settled at 1.2487 yesterday after spiking briefly to 1.2811 and has been trading around 1.25 so far this morning. Economic data today will show Jobless Claims for the week of November 14th, October Leading Indicators and the Philly Fed Survey for November. The slowing economic outlook continued to weigh on energy prices Wednesday with NYMEX crude closing down 77-cents at $53.62 and have dipped as low as $52.65 this morning.

Gold was again contained to narrow range trade across Asia and Europe yesterday before spiking from $735 to $763.10 around the PM fix as the Euro ran higher. The Euro’s swift reversal caused gold to do the same with gold closing at $738.40, although the metal has posted modest gains so far this morning. The return of investment interest into Gold ETF’s is encouraging, however a further failure at $765 yesterday again suggests the metal is vulnerable to another test lower, back initially to $700 but potentially down to $680-650.

Gold

Despite spiking to $9.86 silver finished in negative territory at $9.38. The metal has dipped to $9.20 overnight and is still showing mixed chart signals, although with gold showing signs of stalling silver could look to dip back to $8.65.

Silver

Despite initial gains in Asia platinum closed Wednesday lower and has lost further ground overnight, dipping back to $791. Despite recent announcements from the top tier producers and the increase in ETF holdings the lack of upside traction in gold and possibility of further risk reduction does leave the metal at risk to selling pressure, although we still view the metal as good value for those with longer-term views.

Platinum

Palladium closed $26 lower at $188 yesterday and has dipped to $180 overnight. Chart support is expected at $178/164 with resistance at $205/212.

Palladium


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