April 25, 2005
TheBullionDesk.com
Despite a round of book squaring on Friday’s close the precious metals complex closed the week with solid gains, with gold up 2.1% and silver up 3.5% after inflationary US PPI and CPI data pressured the dollar. On the week the dollar was down around 1.3% with the Euro closing the week at 1.3050, up from last weeks close of 1.2880 but off the weeks high of 1.3124. In the coming week economic data, which includes first quarter GDP, durable good and consumer sentiment; will have a large influence in market direction as traders continue to look for a break from the 1.28-1.31 range by the Euro. Gains were also seen in the oil and base metal complexes Friday on supply concerns.
Gold started Friday at $432.60 and after a brief round of selling on the Asian open began to tick higher. Gold fixed in London at $433.40 but went largely unchanged ahead of the US opening. Fund buying on the COMEX open led gold to the days high of $425.25 but once the buying was satisfied slipped back to its opening level of $433.50. The yellow metal spent the rest of the day trading $433.50-35 and closed at $433.75 with a gain of $9 on the week.
Overnight safe-haven interest has been seen in gold and with some big question marks rising over the health of the US economy we could be looking at a week of further gains for the yellow metal. The metals major obstacle remains the Euro inability to break above 1.31 and could see gold detach itself from its recent correlation with the Eurozone currency and push higher on its own. Gold’s upside target remains $440 with support seen back at $428-30. Friday’s COT data has shown little change in the net non-commercial position which stands at 355.8-tonnes.
Silver closed Thursday at $7.20 and as with gold saw light bids, lifting the metal to $7.25. Silver fixed slightly easier at $7.235 before pushing on to the days high of $7.31 in early COMEX trade after fund buying emerged. Once the buying was satisfied silver traded out the rest of the day between $7.23-28, closing the week at $7.25 with a gain of 25-cents of 3.5%.
Mixed interest has been seen so far in silver but overall the metal is looking steady with further gains on the cards. Silvers upside target remains $7.40 but with the Euro unable to crack 1.31 the metal should continue in the $7.15-30 area. Further support should be seen between the 100-day MA at $7.05 and $7. The latest data from the CFTC showed a 4.7m/ozs increase in the net non-commercial position for the week ending April 19th and now stands at 188.18m/ozs.
Both platinum and palladium saw thin interest on Friday. On the week platinum gained $10 while palladium added just $2.50 to close the week at $200.
Platinum should continue to work between $865-80 while palladium will find plenty of scaled up resistance ahead of $205. Friday’s CFTC data saw platinum’s net non-commercial position increase 22,250/ozs to 218,950/ozs. Palladium’s fell 50,600/ozs to 650,700/ozs as short positions increased.
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