London Bullion Report
Metals find support but remain vulnerable short−term
Tue, Jun 9 2009, 10:04 GMT
by Bullion Desk Team
The Bullion Desk | View company's profile
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London, 09 June 2009 - Gold and silver sagged to their lowest level in over a week yesterday as firmer dollar sentiment triggered pockets of liquidation from stale longs.
Commodities as a whole proved quite mixed with the CRB Index closing down 0.7%; NYMEX crude closed down 55-cent while aluminium hit a 5-month high on the back of speculative buying interest.
Profit taking dampened equity sentiment yesterday with European and US bourses closing down, although the Dow managed to post a gain of 1.3-pts. Follow through weakness has been seen overnight with the Nikkei currently down 0.9% and the HSI 1.3%. The dollar began Monday in a strong mood with EUR/USD dipping to 1.3804 and the DXY reaching 81.30 before profit taking emerged in the latter part of the day with the greenback closing only slightly higher with the DXY up just 0.2%. Economic data today will show German and French Trade Balance and US Wholesale Inventories in addition to an address by Treasury Secretary Geithner.
Bargain hunters helped lift gold initially yesterday however the metal stalled ahead of $960 and traded down to $944.85 in early Europe. Gold settled into a narrow band between $946-52 before dipping down to the day’s low of $943.60 around the PM fix. Gold closed in a steadier mood at $951.10 and has seen two-way trade this morning, straddling the $950 level, but given the scale of longs in the market and the recent reactions to dollar strength gold is vulnerable to further pressure in the short-term. Good chart support is expected around $942 and below at the $930-28 level while we expect the current dip to be viewed favourably by longer-term investors still wishing to offset QE relation inflationary/devaluing fears.

Silver tracked gold lower yesterday, posting a low of $14.73 and closing at $14.96. As with gold silver will benefit from a correction/period of consolidation although the metal should find strong support around the $12.63 level.

Both platinum and palladium closed 2.3% lower yesterday as a result of the pressure of gold and silver, despite a 5.1% increase in platinum ETF holdings.
Mixed trade has been seen again this morning in both metals with chart support in platinum expected between $1233-1204 and in palladium between $246-251.


Published on
Tue, Jun 9 2009, 10:07 GMT
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