Warren Buffett“A public opinion poll is no substitute for thought.”
Adlin Sinclair“Success is a welcomed gift for the uninhibited mind.”
Gold tracks risk, PGMs near highs on supply concerns
London, 31 March 2010 – Base Metal prices continued to be driven higher by strong fund interest yesterday with copper and nickel reaching their best in over a year. Firm energy prices and the strong tone in base metals led the CRB Index to close with a modest 0.3% gain. In contrast the precious complex struggled for traction with gold closing down 0.45% as the dollar firmed on the back of upbeat Consumer Confidence.
EUR/USD was down 0.45% by the close while the dollar surged over 2.5% against the Yen and has pushed to its best in almost 12-weeks overnight touching 93.59 and is currently trading up 0.4%. The Australian Dollar has lost ground this morning after Retail Sales missed their target, declining 1.4%.
Equities closed little changed yesterday and have come under pressure overnight with the MSCI Asia Pacific Index currently down 0.25% and the Nikkei off around 0.1%. Other data today will show EU Flash CPI Estimate & Unemployment Rate , US Chicago PMI & Factory Orders. Close attention will also be paid to today’s ADP Employment Change ahead of Friday’s NF Payrolls. Treasury Secretary Geithner and FOMC member Duke are also due to speak.
Gold continued to take direction from the EUR/USD cross yesterday, closing down 0.45% after posting a high of $1113.50 in Europe before sliding to a low of $1101.70 during US trade. Silver closed 2-cents lower after spending the day in a narrow range between $17.22-47.
Month and quarter-end today and the shortened trading week due to Easter celebration are likely to mute investor risk appetite. Gold for the moment continues to consolidate with good volumes of physical and investment demand providing support, however the metal remains capped by overhead mid-term downtrend resistance and the 100-Day MA ($1120) with another stalled rally potentially triggering a re-test of the $1085 level. Similarly silver is struggling to conquer overhead resistance between $17.43-66. A break could open the way to challenge $18 while a failure would likely re-test the $16.55 area.
Platinum tracked lower on the back of gold and silver but closed off the day’s low after Lonmin announced the closure of its number-one furnace at the company’s Marikana facility. Palladium closed $2 lower after holding in a tight range.
Both metals have seen a solid start with platinum up over 1% in reaction to the Lonmin news and the possible implications of lower metal supplies; palladium has traded to its best in over a week at $478. Both face further resistance ahead this year’s highs of $1655/$482 however tightening fundamentals as industrial and investment demand increase look set to push the complex to fresh highs in the coming sessions.
Published on Wed, Mar 31 2010, 10:44 GMT