Gold came under pressure yesterday as new highs prompted some profit-taking

Gold came under pressure yesterday as new highs prompted some profit-taking. The selling gained momentum as Asian participants questioned the sustainability of the recent renewal of confidence in financial markets. However, there was good support evident at the $1,645 level for gold, which limited the losses among the other precious metals. This support seemed to stem largely from Chinese buyers stocking up ahead of the New Year holidays (with tomorrow being the last day of work for many Chinese).

Sticking with China, many are anticipating the PBoC to lower reserve requirements by tomorrow. This is also adding to support for Gold, and metals in general. However, as outlined yesterday, we find that historically, changes in the reserve requirement have little bearing on commodity prices over the long term. Therefore, any positive reaction to a lowering of reserve
requirements we would deem as knee-jerk, with a downward correction following soon afterwards.

This morning we’ve seen gold see-saw, with upward momentum quickly stymied by profit-taking and physical interest preventing prices from falling too far. The rest of the precious metals complex continues to take gold’s lead on the up, although PGM have come under more downward pressure. The weight on PGM is most likely due to markets finally moving on from the Eskom story in South Africa. Dollar movements, in particular against the euro, once again appear as a major driver of Gold prices. To this end, the dollar’s reaction to this afternoon’s US industrial production data could have a significant bearing on Gold.

Gold support is at $1,642 and $1,629. Resistance is $1,669 and $1,682.


Related Posts Plugin for WordPress, Blogger...

KLSE Info Zone

About This Blog

Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

Blog Malaysia


  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP