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London Bullion Report

Precious metals tick higher ahead of GDP reading

Fri, Jul 31 2009, 07:45 GMT
by James Moore

The Bullion Desk  |  View company's profile


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London, 31 July 2009 - Commodities and equities regained more upbeat sentiment yesterday following strong earnings reports, positive jobs data and good demand at the latest treasury auction. In addition the dollar lost ground ahead of today’s GDP reading, forecast to show the economy contracted just 1.4% in the second quarter compared with a previous reading of -5.5%. The DXY finished 0.4% lower while both the Euro and Yen are in positive territory this morning.
The bounce in equities yesterday saw both the DJIA and S&P500 posting fresh highs for the year before easing, closing with respective gains of 0.9% & 1.2%. Rallies have continued overnight with both the Nikkei and HSI currently up around 1.8%.

Gold was initially confined to a narrow range during Thursday’s Asian session before posting modest gains across European and US trade. The metal set a high of $937.25 shortly before closing at $936.30 and has found further support overnight, trading just short of $940 on the European opening. Gold is likely to reflect the skittish mood in equities and currencies over the next few weeks as thinner summer-holiday markets react to the changing economic picture and knock-on effect this has on investor risk appetite.
Overall we would look for the metal to consolidate in a broad band between $925-65; although we still see the metal at most risk to a deep correction in the short-term.

Gold

Silver closed Thursday with a 1.5% gain after rallying to a high of $13.61 and has tracked gold higher this morning. As with gold we expect silver to trade broadly sideways over the next few weeks with chart support seen back towards $12.90 and resistance at $13.65/13.90/14.10.

Silver

Platinum finished with a gain of 0.6% yesterday and has traded up to $1200 this morning. Further chart support is expected around the 100DMA ($1165) while resistance above $1200 is seen at $1225.

Platinum

Palladium firmed back to $260 by the close yesterday. The metal remains supported by improved fundamentals and positive chart picture, further support below is expected around the 20 & 40 DMA (248.50 / 247.90) while clearance of last month’s $266 high could see the metal push up to the $290-310 area.

Palladium


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