London Bullion Report
Gold holds gains as oil trades close to record
Tue, May 6 2008, 06:51 GMT
by James Moore
The Bullion Desk
London, 06 May 2008 - Having closed above the psychologically important $850/oz level Friday the precious metals set about a recovery yesterday, fuelled by safe-haven demand, inflationary concerns as crude soared above $120/barrel, and the return of weaker dollar sentiment. Favourable fundamentals pushed NYMEX crude futures for June to a peak of $120.36 before closing up $3.65/barrel at $119.97. Despite positive ISM Service data the US dollar closed under pressure with EUR/USD settling at 1.5500.
Gold jumped on the start of Mondays’ Asian session as news broke of the scale of devastation in the region, caused by Cyclone Nargis. The yellow metal held firmly above $860 although remained capped by resistance at $865 till the start of trade in the US. Despite running into pockets of selling the combination of oil gains and dollar weakness led the metal to a high of $873.40 shortly before closing at $872.75. Seasonally strong physical demand should continue to provide a good base for gold in the coming sessions, and with oil prices setting fresh records investors may look to increases their gold holdings as a hedge against inflation. On the charts support should be found at $872/868/860 and again around $850/oz while resistance is pegged at $882/888/893 and $900.

Silver again looked to gold for direction, trading to a high of $16.82 shortly after the US opening and closing at $16.75. Good technical support should continue to be found at the $16.40 and $16.22 chart levels while resistance for now is expected at $17.04 and $17.30.

Platinum closed back above $1900/oz yesterday, settling at $1924 as investors and industrial users viewed the recent correction favourably. With platinum week soon upon us traders are likely to play close attention to market fundamentals, particularly with the release of the Johnson Matthey platinum report which will give a clear indication on the scale of deficit anticipated this year. On the charts support is pegged at $1904/1885 with resistance now expected at $1936.

Palladium gained $4 yesterday, closing at $418. Scaled down support should be found back to $400 with resistance at $435/446.

Published on
Tue, May 6 2008, 06:54 GMT
Archive
- Gold & silver rangebound, platinum steady ahead of Platinum Week
Published On Thu, May 15 2008, 06:36 GMT
- Precious metals finish lower as dollar firms
Published On Wed, May 14 2008, 06:38 GMT
- Softer oil reduces anti-inflation demand for gold, platinum off highs
Published On Tue, May 13 2008, 08:40 GMT
- Gold capped by chart resistance, platinum drifts on profit taking
Published On Mon, May 12 2008, 08:13 GMT
- Oil triggers inflation demand for gold, platinum up on ETF speculation
Published On Fri, May 9 2008, 10:08 GMT
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