Precious metals are resisting a move higher, and it appears some consolidation is in the making.

















Risk appetite remains in place: the dollar continues to weaken this morning; equities performed very well yesterday, US treasury yields are higher, and high-yielding currencies are stronger. However, commodities have failed to respond. In the futures market, many of the commodities have very long spec length, which is possibly adding to reluctance to add further long positions. Looking at the broader market, upside bias might remain. However, US will have a data-heavy day today, which might restrain the markets.

US CPI is due for release; most of the investor expect a further y/y decline. M/m, it should show a small rise. But overall, the data should show very few inflationary pressures. In the US, the market continues to price a very low probability to any rise in interest rates. According to the futures market, there is only a 32% prob. of a 25 bps rise by June next year. The options market sees this probability at only 5%.

So, from a liquidity perspective, this remains supportive of Gold. At current price levels, there is little appetite in the physical gold market. Scrap selling continues, which is adding to the resistance. Expected resistance to remain in place until the dollar weakens further. Gold support is at USD1,050 and USD1,040, with resistance at USD1,070 and USD1,077.

Back home, Malaysia gold price drop back to 1st support line at RM113 per gram after hits high at RM117 per gram. However with closing to year end physical gold in Malaysia usually increasing so this will give Malaysia gold price a support at RM113 level. As international gold price likely to move sideways, Malaysia gold price may also like follow.

Public Bank Gold Investment Account as at 15/10/09 3:51 PM


Selling PriceBuying Price
1 gramRM 116.9700RM 112.4300

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