London, 17 November 2009 - Equities and commodities saw another upwards leg yesterday, bolstered during Asian trade by the APEC’s pledge to maintain economic stimulus and later in the US session by positive data and an extension of the dollars decline. The Dow gained 1.4%, S&P 1.3% and CRB Index 2.8% while the greenback slipped to fresh lows with the DXY dipping to a 15-month low of 74.67 as an initial rally in reaction to Bernanke’s support for the dollar was reversed soon after on speculation the US would maintain low rates for an even longer period of time.
Equity and commodity prices have opened in a softer mood this morning as Bernanke’s comments have tempered investor risk appetite. Currently the Nikkei is down 0.6% and the MSCI 0.4%. The dollar has edged slightly higher with the DXY up 0.25% while the Aussy Dollar is off 0.5% as the release of the RBA’s minutes has led to speculation the central bank may not raise rates at its next meeting. Economic data today will again be monitored with the line-up including the BoE Inflation Letter, EU Trade Balance, US PPI Industrial Production and Treasury Purchases.
The weaker dollar led gold to open up $5 from Fridays close and after a steady start the metal began to gain traction posting a high of $1130.60. The metal edged up to $1133 in early Europe before consolidating between $1125-31 across the remainder of the session. Stronger bids returned once the US session was underway and despite the brief dollar bounce gold extended its gains, eventually reaching a high of $1143.60 in after-market trade. The metal also hit an all-time high in Indian Rupees and multi-month highs in Euros, Swiss Francs, A$ and Canadian Dollars.
Gold has eased back to $1134 overnight but despite the metal looking top heavy it seems with the prospect of further dollar weakness gold will remain bid, potentially pushing to fresh highs above $1150 in coming sessions.
Silver finally conquered the $17.90-18.10 resistance band yesterday, jumping sharply higher during US trade as strong fund buying emerged. The metal hit a high of $18.45 in the after-market session with the AU/AG ratio falling to close below 62 for the first time in 3-weeks.
Having finally cleared overhead resistance silver may look to extend its gains as investors seek a cheaper alternative to gold. The metal may now look to target chart resistance at $18.75/18.90 and above at $19.47.
PGM prices surged yesterday as the APECs pledge to maintain economic stimulus triggered an influx of buying interest. Platinum closed up almost 4% hitting a 14-month high while palladium gained 5%, reaching $377. ETF Securities holdings increased 10Kozs to a record 591.3Kozs.
Today will see the release of the JM Interim Report, but given the likely bullish picture and strong tone in the rest of the complex both metals may look to extend their gains, testing resistance at $1490 in platinum and $400 for palladium.
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