Gold Has Traded In A Very Narrow Range Between $938 And $942















Despite equities gaining Friday US Market it believe there is once again some risk aversion creeping back into the market. This is reflected in the good performance of US Treasuries since the start of the week. This could support the dollar at current levels around $1.4300 against the euro. Yesterday it was reported that almost 10% of homeowners in the US are either behind schedule on mortgage payments or in a state of foreclosure. This is high. The data for the US goes back to 1979. In this 30 year period the previous highest rate was only 6.07%. This was in 1985 and the figure reached its highs only 3 years after the end of the 1981/82 recession.

Total write downs by financial institutions since the start of the credit crises is at $1.6 trillion. This looks set to rise further. Total capital raised by institutions are at $1.3 trillion. This might also need to rise further. While higher risk might support the dollar, it should also support gold.

Since falling towards $938 yesterday, gold has traded in a very narrow range between $938 and $942. I do not expect this to continue for long. I believe the bias is for gold to break lower. Gold support is at $937 and $933, with resistance at $945 and $949. Everybody knew the US "cash-for-clunkers" program would end. However, the US indicated this could be as soon as next week.

Auto sales could be hit - so could US equities and so could commodities. This is also likely to depress PGM prices despite the news that Impala Platinum workers would strike. Base on some report from US said that support for platinum at $1,220 and resistance at $1,245. Palladium support is at $270 with resistance at $277. Silver is still struggling and believe bias for the metal remains to the downside. With copper failing to push much higher, silver’s march higher has stalled. Silver is finding support at $13.75 and $13.30, with resistance at $14.00 and $14.25.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

For the gold price, two outcomes are possible.

Image
For the gold price, two outcomes are possible. First is a return to or near the April low ($1,277.40). Second is a drop to a lower low, $1,240 - $1,260. Yet a third possible outcome is that the June and December lows were not a double bottom and one further drop may come. I account that the least likely, and look for a low here by the end of the week, but I'm no more'n a nacheral born durnd fool from Tennessee, so what do I know?   You'd think that an institution charged with promoting the gold industry would produce reports that at least cast the best light on gold's prospects. You'd think wrong, if you're thinking about the World Gold Council. They've been negative on gold for, oh, the last 14 years or so. Today they issued a report that contained a nugget about Chinese business using physical gold as collateral for bank credit ($40 bn worth) but they managed to tease a gloomy forecast even out of this inventive monetary use. That and bad
Read more

The price of gold advanced as high as $1,603.40 per ounc

Image
The gold price broke out to a new all-time high above $1,600 per ounce Monday morning, rising for the eleventh consecutive trading session. The price of gold advanced as high as $1,603.40 per ounce before backing off to trade just the $1,600 level. The yellow metal gained on the back of a surge in borrowing costs for Italy, the latest European nation to see its bond market come under heavy selling pressure. The lack of a deal to raise the $14.3 trillion debt ceiling also helped boost gold prices. The eleven-day rise in the gold price is the longest winning streak since January of 1980. The gold price delivered another noteworthy performance last week, climbing 3.2% on its way to a series of fresh record highs. With Monday’s advance, the gold price extended its monthly and year-to-date gains to 6.6% and 12.5%, respectively. Last week’s two-day Congressional testimony by Chairman Ben Bernanke on the economy and monetary policy revealed that the Fed remains open to the
Read more