Thursday, November 4, 2010

Gold appraoches 1400

Gold is still bounded in range of 1315.8 and 1388.1 in spite of all the volatility. Intraday bias remains neutral and another dip could still be seen to 38.2% retracement of 1155.6 to 1388.1 at 1299.3 before the consolidation concludes. On the upside, though, decisive break of 1388.1 high will confirm up trend resumption for 1400 psychological level next.

In the bigger picture, rise from 1155.6 is treated as the fifth wave of the five wave sequence from 1044.5, which should also be fifth wave of the rally from 681 (2008 low). While a short term top is in place at 1388.1, there is no confirmation of reversal yet. Recent up trend could still extend further to 161.8% projection of 931.3 to 1227.5 from 1044.5 at 1449.6 before completion. Though, we're aware of long term projection target of 100% projection of 253 to 1033.9 from 681 at 1462 and we'd anticipate strong resistance from there to bring medium term correction finally. On the downside, however, break of 1266.5 resistance turned support will be an early alert of medium term reversal and will turn focus back to 1155.6 support for confirmation.

Tuesday, June 1, 2010

GOLD - Set To Strengthen To 1,249.28

After a fifth day of recovery on Friday to end the week higher and taking back part of its weakness started from the 1,249.28 level, the commodity now looks to strengthen further towards the 1,226.33. It traded to as higher as 1,217.88 in today's trading session. A decisive break through its 2009 high at 1,226.33 is required to create scope for further strength towards the 1,249.28 level, its 2010 high with a break of there setting the stage for a move higher towards the 1,300 levels, its psychological levels and next the 1,350 level. Note that our overall outlook remains to the upside longer term. On any pullbacks, its psycho level residing at 1,200 will be targeted ahead of the 1,166.03 level, its May 21'10 low. A cap is expected here to turn the commodity back up in its original direction. Further out, the 1,156.90 level, its May 05'10 comes in as the next support. All in all, though Gold is now on the offensive, it requires a break and hold above the 1,249.28 level to resume its longer term uptrend.

Tuesday, April 27, 2010

Greek Uncertainty Pushes Gold Back

Profit taking has caused a decline in gold in early trading after it reached a week's high yesterday at $1159.84, as the Greek government requested the deployment of the 45 billion euro aid package provided by the EU and the International Monetary Fund (IMF).

Gold reached $1155.85 today, retreating 0.2%, while platinum rose by 0.6% to $1753.25. Palladium gained 1.7% advancing to $572.70 and silver ascended by 0.2% to $18.373.

The greenback appreciated against the euro after the German Finance Minister Wolfgang Schauble announced that Greece needs to provide clear commitment and plans on how to reduce its deficit in 2011 and 2012 and not only this year in order to receive further aid packages from the EU members. This may raise doubts whether Germany, the biggest contributor to the aid package, will show consent in aiding Greece.

The markets are in an alert state as they wait for the Greek finance minister to negotiate fund for the debt that matures May 19. All eyes are on Germany which may back away from the aid package aimed at reducing the 12.7% Greek budget deficit.

Gold is expected to remain stable at current prices, until a final solution for the Greek crisis will be found. The future outlook for precious metals is nonetheless bright, as platinum and palladium will be supported by Asian growing industries, while gold and silver will benefit from the global financial recovery.

S&P GSCI closed unchanged yesterday at 548.86, while RJ/CRB lost 0.67 points and closed at 278.38.

Gold futures due June at 2:44 EST fell by 0.05% to $1153.400, while silver futures retreated by 0.099% to reach $18.270 and copper futures fell by 3.600% to $351.200.

Tuesday, March 30, 2010

Consolidation likely for gold.

Gold closed lower due to long covering on Tuesday as it consolidated some of the rally off last week's low. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning neutral hinting that a short-term high might be in or is near. Closes above the 20-day moving average crossing would confirm that a short-term top has been posted. If it extends this week's decline, February's low crossing is the next downside target.

Monday, March 29, 2010

Gold Prices Decline On Renewed Greece Budget Fears

The precious-metal prices are slightly changed while there are anticipations that Greece's budget woes continue which in the future will boost the dollar as investors seek safe-haven assets therefore reducing the appeal of gold as an alternative investment.

Friday, gold rose $15.70 or 1.44% to close at $1107.28 an ounce while the dollar lost strength six major currencies which are measured by the Dollar Index, declined Friday to close at 81.23 while recording a high of 81.38 and a low of 81.22.

Among other precious metals; platinum is traded at $1605.50 from $1597.50; palladium at $459.50 from $455.70; silver at $17.08 from $17.00; while, copper is at $346.86 from $346.30. Turning to commodity futures we see last week Friday, S&P GSCI closed at 512.99 points recording a high of 519.82 points and a low of 511.40 points while RJ/CRB Commodity closed at 267.32 points recording a high of 269.12 points and a low of 266.64.

SPDR gold trust, the largest exchange-traded fund backed by bullion in the world, stood steady at 1,124.64 metric tons. Gold was set in London on Friday at $1096.50 per ounce declining from $1098.00 per ounce during the AM fixing.

In addition, stocks in Asia climbed as a result of commodity and bank stocks rising while metal prices rose while China Petroleum & Chemical and China Construction Bank Corp. posting higher earnings.

Turning to oil, we see that prices are rising as a result of projections that there will be higher demand on fuel as a result of global economic recovery occurring therefore encouraging investors to enter oil markets as they seek potential in profits.

Currently, spot gold is traded at $1111.92 an ounce recording a high of $1112.80 an ounce and a low of $1105.55 an ounce.

Friday, March 26, 2010

Gold Regains Slightly As The Strong Dollar Continues Its Trend

Gold regained strength on Thursday but a strong greenback capped gains while uncertainties about the outcome of a European Union summit drove some investors away. 'There's a bit of physical buying and this is expected because the price has dropped nearly $20,' said a dealer in Hong Kong. 'But sentiment has turned bearish because we have broken several key support levels.' Uncertainty about currencies and debt problems in the euro zone had pushed up gold prices last week despite a stronger dollar, but dealers said buying had dissipated after bullion failed to sustain the gains. Gold is trading at $1,083 as of 21:34pm, GMT, with a bearish trend. Gold's Pool-Position is 43% Long, meaning that most Finotec clients are selling the precious metal.

Thursday, March 25, 2010

Gold Rebounds Ahead Of The EU Summit

Precious-Gold rebounds from its lowest level in six weeks hit yesterday as the dollar halted its rally ahead of the EU Summit two-day meeting starting today. Meanwhile, gold is traded at $1091.90 an ounce after getting support at $1084.00 levels.

Yesterday, gold shed $15.30 or 1.39% to close at $1087.25 an ounce. Gold Price was set in London on Wednesday at $1090.75 per ounce during the PM fixing declining from $1094.00 at the AM fixing.

However, gold rose today as the U.S. dollar stopped its advance against majors as seen by the dollar index, which tracks the dollar movements versus a basket of major currencies, which fell to 81.79. The dollar index inclined after breaching resistance at 81.30 the previous day but stalled its rise after hitting resistance at 81.90, where it could not stay above it after reaching a high of 82.05.

The largest boost given by the dollar index was from the euro which represents 57.6% of the index as it is currently traded near 10-month low against the green currency. Still, the outlook for the 16-nation currency is frightening due to concerns surrounding the bailout of Greece.

It seems that Greece will not receive an aid after the EU Summit, especially as Germany referred that the IMF is optimal solution for helping Greece. The euro is predicted to remain under pressure with the high deficit problems spilling over EU members. Fitch Ratings lowered Portugal's sovereign credit rating to AA-minus from AA yesterday and said that it sees negative outlook for the country. Spain is also suffering from high debt along with other macroeconomic problems.

The depreciation of the euro is affecting gold that dropped $18 since Monday. The shiny metal reached high records last year as a hedge against inflation on the back of the huge spending by governments and central banks all over the world, but now with the decline in inflation levels and gradual scale back of stimulus gold may lose momentum again.