Precious Metals Market Report
Tuesday 11 April, 2017
Fundamentals and News*
Gold slips further from five-month high on Fed expectations
Gold slipped further on Monday from the previous session’s five-months high, as expectations that the Federal Reserve will press ahead with interest rate hikes counterweighed concerns over political tensions in North Korea and the Middle East.
Spot gold fell 0.10 percent to $1,252.32 an ounce, little changed from late on Friday, while U.S. gold futures for June delivery were down $3.40 to settle at $1,253.90.
The metal rose above $1,270 on Friday for the first time since early November after much weaker than expected U.S. jobs data curbed expectations for near-term increases to U.S. interest rates and after the United States launched a missile strike on a Syrian air base.
It fell back quickly in later trade, however, failing once again to beat key chart resistance at its 200-day moving average, which has broadly capped gains since October.
There appears to have been some profit taking after that move above the 200-day moving average on Friday,” Mitsubishi analyst Jonathan Butler said. “Friday’s U.S. unemployment reading, which fell to a 10-year low, would appear to confirm that the United States is approaching full employment,” he said. “This has increased the probability of a June rate rise… (and) clearly weighed on gold.”
The dollar started the week near three-week highs against a basket of currencies after a key Federal Reserve official reinforced the U.S. central bank’s commitment to continue raising interest rates
Expectations that the pace of U.S. rate increases will pick up this year, lifting the opportunity cost of holding non-yielding bullion; have proved a major drag on gold. The euro also came under pressure from worries over the tightening race for the French presidency.
The wider financial markets took on a more cautious tone on Monday, however, with trading volumes muted by geopolitical tensions in the Middle East and the Korean peninsula.
Top aides to President Donald Trump differed on Sunday on where U.S. policy on Syria was headed after last week’s attack on a Syrian air base, while Secretary of State Rex Tillerson warned that the strikes were a warning to other nations, including North Korea.
“Geopolitical tensions are likely to be supportive and may put the brakes on what would otherwise be a retracement from the mid-March uptrend,” MKS said in a note.
Among other precious metals, silver was down 0.39 percent at $17.89 an ounce, having hit its highest since Feb. 27 at $18.47 on Friday.
Platinum lost 1.44 percent to $937.80, while palladium dropped 1.90 percent to $786.25
(*source World Gold Council)
Data – Forthcoming Release
Technical Outlook and Commentary: Gold
Gold for Spot delivery was closed at $1254.68 an ounce; with little change of $0.15 or 0.01 percent at 1.00 a.m. Dubai time, from its previous close of $1254.53
Spot Gold technically seems having resistance levels at 1266.8 and 1273.2 respectively, while the supports are seen at $1246.1 and 1239.7 respectively.
Technical Outlook and Commentary: Silver
Silver for Spot delivery was closed at $17.95 an ounce; with loss of -8cent or -0.45 percent at 1.00 a.m. Dubai time, from its previous close of $18.31
The Fibonacci levels on chart are showing resistance at $18.33 and $18.50 while the supports are seen at $17.77 and $ 17.60 respectively.
Resistance and Support Levels
Indications only, open & closing prices are bids; data source: Bloomberg; important disclaimer below; Times as per Dubai
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