London Bullion Report
Gold holding ground above $1000 despite stronger dollar
Thu, Oct 1 2009, 07:42 GMT
by James Moore
The Bullion Desk | View company's profile
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London, 01 October 2009 - Commodities finished Wednesday in a mostly upbeat mood while equities struggled as weaker than forecast jobs and PMI data trigger bouts of selling. The CRB Index gained 2.9% and NYMEX crude jumped almost $4/barrel while gold gained 1.5% and palladium 3.6%. The combination of weak data and month/quarter-end book squaring weighed on equities across the day with the FTSE closing down 0.5%, the Dow and S&P off 0.3%. Despite the weaker tone in equities the dollar failed to find support with the DXY down 0.4% and off more than 4% across the quarter.
Equities have traded lower overnight after a weak Tankan survey triggered selling in Japanese shares. Currently the Nikkei is down 1.6% while the HSI is off 0.3%. The dollar has also made back some lost ground against the Euro with the DXY currently up 0.5%. It’s another busy day for economic data which includes Eurozone and UK PMI, US PCE Index, Jobless Claims and ISM Index in addition to testimony from Fed Chairman Bernanke.
Gold began to tick higher across the early part of Wednesday reaching $1004.70 by the US opening. The rally stalled soon after with gold drifting back to $994.50 as the dollar firmed before recovering towards the close to finish the day at $1008 up 1.5%.
Gold has seen a mixed start this morning and for the moment appears to be holding ground despite the stronger dollar.
Overall we would look for gold to hold in a broad range between $985-1020 but expect dips to remain supported by longer-term investors looking to offset inflation fears and dollar weakness resulting from huge US deficits.

Silver opened near the days low of $16.15 and tracked gold higher across the day trading initially to $16.50 before posting a high of $16.70 shortly after closing at $16.64.
Silver has briefly touched $16.77 overnight before drifting lower on dollar related profit taking. The industrial metal looks set to track gold and the dollar in the coming session with chart support pegged at $16.15/15.75 with further resistance anticipated at $17/17.67.

Platinum and palladium both traded higher as a result of commodity wide gains. Platinum gained 1.8% and palladium 3.6% despite almost 10Kozs of redemptions from the ETF Securities fund.
Both metals have softened this morning and may be vulnerable to further pressure due to the scale of speculative and investment longs and the start of weeklong national holidays in China. Further chart support in platinum is pegged at $1272 (40DMA) $1235-60 and $268-82 in palladium.


Published on
Thu, Oct 1 2009, 07:49 GMT
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