Precious Metals Market Report
Wednesday 12 July, 2017
Fundamentals and News*
Gold Prices Have Cratered
Gold extended declines in early Monday trading, touching a three-month low, amid a move by investors into higher yielding assets in anticipation of interest rate increases from the world’s major central banks.
Spot gold prices were marked 0.5% lower at $1,207.2 in European trading, the lowest in more than three months, even as the U.S. dollar gave back some of the gains booked in Asia trading.
Gold has fallen more than 6.7% over the past month, with the bulk of the decline coming in the latter days of June when three of the world’s top central bankers — Janet Yellen, Mario Draghi and Mark Carney — made speeches indicating that interest rates will begin to increase around the world as economies grow and the effects of the financial crisis are finally left behind.
U.K. listed gold mining stocks have also suffered over the past month, with Randgold Resources falling more at 14% and rival Fresnillo Plc slumping more than 15.17%. In New York, the SPDR Gold ETF has fallen 6.35% over the same 30-day period and closed at $115.28, the lowest since March 14.
Prices could decline further in the months ahead, some analysts have warned, as global bond yields continue to rise in anticipation of higher interest rates from the U.S. Federal Reserve and, potentially, the end of the European Central Bank’s €2.3 trillion program of quantitative easing.
Benchmark 10-year German government bond yields, known as bunds, have risen 32 basis point to 0.57% since last June, while 10-year Treasury yields are now 14 basis points higher, providing a safe, higher-yielding alternative to gold investment.
(*source Bloomberg)
Data – Forthcoming Release
Technical Outlook and Commentary: Gold
Gold for Spot delivery was closed at $1217.72 an ounce; with gain of $3.36 or 0.28 percent at 1.00 a.m. Dubai time closing, from its previous close of $1214.34
Spot Gold technically seems having resistance levels at 1226.7 and 1232.4 respectively, while the supports are seen at $1208.10 and 1202.4 respectively.
Technical Outlook and Commentary: Silver
Silver for Spot delivery was closed at $15.85 with gain of $0.20 or 1.26 percent at 1.00 a.m. Dubai time closing, from its previous close of $15.65
The Fibonacci levels on chart are showing resistance at $16.15 and $16.39 while the supports are seen at $15.35 and $ 15.11 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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