London, 24 November 2009 - Risk appetite remained upbeat yesterday as equities and commodities gained and the dollar weakened, meanwhile gold pushed to a new record above $1170/oz as further buying was seen ahead of the December option expiration. The CRB Index posted a tame 0.1% increase despite the strength in precious metals and a 1% gain in crude oil. US equities were more buoyant with the Dow and S&P500 ending up 1.3%. The Dollar Index finished the day down 0.6% while holding in the recent 74.80-75.75 range, as did the EUR/USD which held the 1.48-50 range.
Equities have begun in a softer mood this morning with the Nikkei currently off 1% and MSCI 1.4% with traders in a more cautious tone ahead of todays revised US growth data and concerns of deflation in Japan. The dollar meanwhile is in a positive mood with the DXY up 0.3% despite German GDP coming in as expected at 0.7%. The data line-up for the rest of the day includes German IFO Business Climate, EU Industrial Orders, US GDP, Consumer Confidence, Richmond Manufacturing Index and HPI. In addition the Fed will release the minute of its last meeting while the head of the Bank of England and Swiss National Bank are due to speak.
Gold opened up around $10 from Fridays close above the $1060 level and continued to test higher in Asia as equities gained and the dollar lost ground. The metal remained supported across the day touching $1167.50 in early Europe and eventually peaked at $1173.90 in the early part of the US session. Light profit taking was seen over the remainder of the day although the metal held above $1160, closing at $1165.
Despite the stronger dollar and weaker tone in equities gold has found good support around the $1160 level this morning and is likely to find further investment demand in the coming session following the 3.9-tonne increase in the SPDR ETF yesterday. As a whole gold will continue to track risk sentiment while scale down support is expected at $1145/1120 while the next upside target is likely to be $1180 and $1200.
Silver rallied to a high of $18.94 as gold hit its peak during Mondays US session before easing back to close at $18.64.
The metal has seen a choppy start so far, working between $18.40-68 and will be looking to gold for direction in the coming sessions. Clearance of chart resistance at $18.90 could open the way to a test of last Julys high at $19.47 while support below is expected at $17.90-18.10.
Platinum traded to a 14-month high of $1476 yesterday before easing back to close with a $5 gain at $1460. Sister metal palladium posted a high of $375 and also closed with a $5 gain. Platinum and palladium will be looking to the other precious metals and broader risk sentiment for direction however with continued investment demand and positive fundamentals both metals could make a challenge of overhead resistance $1490 & $400 in the coming sessions. Another substantial increase was seen in ETF Securities palladium holdings yesterday, up 13.6Kozs to a record 616.4Kozs.
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