Precious metals trading opened on a slightly weaker note this morning as minor gains in the US dollar and a small decline in crude oil and copper dampened buying enthusiasm somewhat more. The spot gold price fell to near the $1,455.00 level but did not yet appear to threaten a breach of the $1,450 support that it had held during overnight trading. Expected ranges for the yellow metal remain between $1,445 and $1,475 through tomorrow, barring fresh, surprise developments.
Midweek Elliott Wave analysis opined that unless a sharp decline follows the backing down from the $1,477 to the $1,444 area we have seen in the yellow metal over recent days, the path is still open for a possible attempt to lift values towards a potential $1,525 target – at which a number of pivotal lines are said to converge. For the moment, the jobless claim figures will have the most likely to be significant impact on market tenor this morning and any spike in same could bring the bulls back to the casino tables. Yesterday’s finding that US foreclosure claims fell to their lowest level in 36 months did not appear to have much of an impact on traders.
Curiously – for the same firm whose own leader opined just last fall that the long-term bulls case for gold is “fatally flawed” – London-based GFMS yesterday offered a projection of $1,600 per ounce gold as attainable, sometime this year. Of course, the $64,000 question, at current prices, turns to assessing whether chasing a further 5 to 10 percent potential gain in the face of extant downside risk roughly twice (or more) as large, is still worth it for latecomers to the speculative party. Long-term insurance gold buyers are exempt from the conundrum as their objectives do not entail the profit motive.
Silver traded in relatively nervous fashion, opening with a small, four penny gain, and then easing by about the same amount immediately after the start of trading, but basically the white metal orbited in the $40.50 to $40.75 space and it is thought to have support that needs to hold at the $39.75 mark. Platinum and palladium offered a parallel picture at the start of this morning’s action; they each lost $1 and dipped to $1,772 and to $762 respectively. No change was reported in rhodium with the current bid at $2,300 per ounce.
In the markets’ background, other countries continued to tackle various first-order issues as the week unfolds. Japan lowered its economic outlook as the toll from its recent catastrophe was being factored in. The Japanese government did however state that it expects the country’s economy to begin to recover in the latter part of 2011. China reported consumer prices as having risen by more than 5.3% last month while also noting a 16.6% y-o-y gain in its M2 money supply. All the more reason for the PBOC to continue with its tightening policy, evidently. Finally, the ECB, in its latest monthly bulletin, reiterated its tough-talk on inflation this very morning, saying that it is monitoring that bogey “very closely.” Can you spell: “hike” again come July?