London Bullion Report
Profit taking emerges after PGM led gains
Fri, Jun 5 2009, 07:43 GMT
by James Moore
The Bullion Desk | View company's profile
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London, 05 June 2009 - Commodities were in a buoyant mood again yesterday with the CRB Index gaining 2.6% and the GSCI 2.5%. PGM’s were the star performers for the precious complex with platinum gaining 4.7% - hitting its best level since September 8th - while palladium rose 5.3%. Gold gained 1.8% and silver 3.7%, edging towards the $16/oz. Crude oil reversed Wednesday’s weakness with NYMEX future for July touching a high of $69.60/barrel and closing up $2.69 at $68.81.
Increasing risk appetite and reaction to comments from both JCT and Ben Bernanke saw the DXY close just 0.2% lower yesterday with attention now turning to US jobs data.
Non-Farm Payrolls for May are expected to show the loss of 520,000 jobs although a sub-600k number could have a dampening effect on this week’s ‘green-shoots’ data. Other events today include UK PPI and speeches by ECB President Trichet and FOMC member Kohn.
More upbeat data led US and most European equity markets to regain their positive tone yesterday following Wednesday’s corrections.
The Dow closed up 0.8% and the S&P500 1.1% while this morning the Nikkei is currently up 1% although the HSI is at a small loss.
Gold was initially supported by bargain hunters in Asia and Europe yesterday before dipping to a low of $961 ahead of the US opening. The metal traded higher from the US opening, reaching $982 by the close and touching $983 in after-market trade. Overhead resistance and scrap flows will continue to slow gold’s progress however the longer-term impact of quantitative easing programmes continue to draw investors towards more tangible assets and as a result commodities, particularly gold will benefit.

Silver tracked gold to a low of $15.08 ahead of the US opening before trading strongly higher the remainder of the day, touching $15.95 shortly after the close. Chart momentum indicators suggest silver is looking top heavy with further strong resistance expected above $16 however the metal will continue to benefit from further demand as investors view the metal as a cheaper alternative to gold.

This week’s economic data and US auto sales results prompted aggressive buying in the PGM’s yesterday with both platinum and palladium reaching their best levels since September. Platinum hit a high of $1297 after stops were triggered above $1264 while palladium reached $255, although both have drifted slightly lower overnight on light profit taking.
Resistance above in platinum is seen at $1320 while a break above double chart peaks from September at $256 could see the metal push on towards $285.


Published on
Fri, Jun 5 2009, 07:50 GMT
Archive
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