Thursday’s markets opened on a mixed note in New York as participants continued to digest the most potentially impactful news items from around the world and translated those conclusions into trading action. Spot gold lost only $1.10 at the open and was quoted at a bid of $1437.50 per ounce. Contract switching, rollovers and emergent pre-weekend trade book positioning are still likely to provide lively action as we head towards Friday’s weekly close.
The yellow metal appears to continue to target the $1,450.00 pivot point and might still end the week walking away with a fresh record book achievement. Odds being offered by Elliott Wave-based technicians remain stacked towards the higher end of the price spectrum (to near $1,525 perhaps) being achievable as we near the end of March. On the other hand, a breach of the March 15 lows could alter that odds-making picture quite quickly and quite significantly.
“Significantly” – at least to Charles Lemonides, the CIO at Value Works LLC – might point to…$400 per ounce gold. Mr. Lemonides tendered his opinion that gold could undergo such a drastic correction (not sure if that word would even apply as such to that kind of decline) when he spoke on Canada’s BNN television network on Wednesday. “I think there’s a lot to be said for what’s happening in the gold market and the commodities markets setting up for a classic collapse.”
The New York-based wealth management firm’s CIO also advises that “once that correction starts it becomes very fast and very powerful and is very dangerous for investors.” Such opinion was obviously in stark contrast to yet another gold mining company CEO’s assurances (also tendered yesterday) that gold is actually headed for $5,000 – not hundred – per ounce, and within the next two years, at that.
Spot silver opened with a gain of 21 cents and a quote of $37.63 while players were seen attempting to push the white metal towards a potential $38.50 price target. However, with 92% bullishness levels being indicated by the Daily Sentiment Index the volatility and nervousness ‘plot’ is likely to only ‘thicken’ as the metal treads in territory last visited decades ago.
Platinum and palladium offered a lackluster showing at the start of the New York session this morning. The former fell $3 to the $1,750.00 round figure while the latter was showing no price change at the $747.00 per ounce mark. Rhodium remained unchanged as well, still quoted at $2,330.00 the troy ounce.
Standard Bank (SA) analytical team reports produced this morning opine that platinum-group metals “appear to be running out of steam, as investors look to taking profits. Perhaps reports of continued production problems at Toyota and Nissan plants in Japan are dampening enthusiasm for these metals. Tactically, we believe on a risk/return basis, that return favours platinum and palladium on approach of $1,700 and $700. Of course, we caution that uncertainty surrounding Japan’s reconstruction could limit rallies, especially until the nuclear power threat has been contained.”
The latest reports from Japan however indicate that Toyota will resume production of its Prius and two other hybrid car models under the Lexus nameplate on the 28th of the month. The giant automaker has shuttered all of its 18 Japan-based plants in the wake of the epic quake that took place on the 11th of this most turbulent month. Supply chains are still under duress and there have been reports that some US Toyota auto production will be curtailed and that parts shipments from the US to Japan might take place and become a reality until the situation is resolved.