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Gold holds range, silver still volatile on ETF speculation - London Bullion Report
17th March 2006
Another frothy day’s was seen in the precious complex Thursday with initial gains by gold and silver in Europe being hard hit as trade got underway in the US. The weaker dollar eventually led the metals back into positive territory, marking the fourth day of gains. The greenback came under heavy pressure in US trade despite a tame CPI inflation reading. The Euro hit a high of 1.2189 before settling at 1.2180 while the Yen closed on its highs at 116.82. Economic data today will show Industrial production and Capacity utilization for February as well as Consumer sentiment which is forecast at 85.0. Tensions in the Middle-east kept oil prices underpinned yesterday with NYMEX crude for April settled at $63.58.
GOLD
Profit taking from Asian dealers put gold under pressure as the days trade got underway with the yellow metal sliding to $550.50 by the European opening. Dealers in Europe added their support to gold with the yellow metal working steadily higher, fixing at $553.25 and touching $554. Gold opened a little softer in the US at $553.25 and was quickly pushed higher as dealer and fund players bid the market aggressively. A high of $556.65 was briefly reached before stalling as heavy selling emerged, putting gold into freefall and sending the metal tumbling to a low of $547.25. Physical buying below $550 prevented gold falling lower and led dealers back onto the bid with gold recovering back to $554.60 by the close.
Light profit taking has been seen overnight but for the moment the metal should remain within the boundaries of the $548-60 range while the longer-term outlook remains bullish as inflation, geo-political instabilities and supply/demand imbalances look set to propel the metal to $600 later in the year.
SILVER
Silver saw another wide 25-cent trading range across the day as traders followed the movements made by gold. The industrial precious metal saw a steady Asian and European session, trading $10.25-30 before pushing to the days high of $10.36. Gold’s fall back towards $548 prompted heavy fund selling and led the metal to a low of $10.11 as stops were triggered. Silver recovered back to close Thursday unchanged at $10.31 and continues to eye upside resistance pegged at $10.50 as ETF speculation continues.
PGM
Platinum failed to make much upside progress Thursday as resistance ahead of $1030 capped the metal. Downside support was strong with a dip to $1012 being quickly reversed. Palladium found good support in front of $305 to close the day at $310 with a $5 loss.
Platinum should find chart support at $1020 while resistance is pegged at $1045 and in palladium a breach of $320 would bring $350 back into view.
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