Silver makes “another day, another dollar” to $46

Overnight losses in the US dollar aggravated sufficiently to bring about currency market interventions on the part of at least two Asian central banks. South Korea and Malaysia tried to prevent their currencies from touching new highs while China allowed the yuan to be fixed at yet another record high against the greenback. The Bank of Thailand was thought to also have intervened in the markets yesterday. Australia’s Foreign Minister Kevin Rudd, on the other hand, stated that his country is “not in the business of regulating exchange rates” despite the Aussie having risen to values not seen since the early 1980s.

This week’s list of hefty US corporate earnings (Apple was the latest to polish its books to a shine) and still-improving US economic statistics stoked a bout of market risk-taking that brought the Dow to nearly the 12,500 level, WTI crude oil to above $112 (and Brent crude at $124) and precious metals to the top of bold-font headlines globally. In pre-holiday trading this morning, the patterns were not much different than those that have been on display for the past five trading sessions, or for most of the current year, as a matter of fact. Crude oil values have risen 22 percent since the start of 2011, for example. Black gold is projected to keep rising until around June, when they are expected to pause

Spot gold dealings opened with a $3.50 per ounce gain in New York and the yellow metal was quoted at the $1,505.10 level on the bid-side. Overnight highs near $1,510.00 were recorded amid the aforementioned dollar-oriented selling overseas but the US currency was seen attempting to regain the 74 level that it breached on the index in the wee hours at the time metals opened for trading in New York. For the moment, the US currency remained near the 73.85 zone ahead of pre-holiday weekend book-squaring activities.

About the only market statistic for dollar (and by extension gold) traders to ‘bite’ into this morning was the weekly initial jobless filings claims number. It fell on the reporting period (by 13,000) but remained above the key 400,000 pivot level for a second week and it was thus unable to lend a helping hand to would-be dollar buyers this morning. However, the advance in gold came to a halt following the first hour of trading and the yellow metal ‘quieted’ down to unchanged levels (near $1,502) as the morning action started to witness the beginnings of the exodus of traders for the long weekend ahead.

As Elliot Wave technicians see the market, the push in gold continues to be aimed at a trendline convergence level near the $1,535 area and only the appearance of certain five-wave reversal patterns would undo such a trajectory at this point. On the other hand, the New York Times noted that “the likelihood is that the Fed will join the global trend and raise rates late this year or early next. The opportunity cost of holding precious metals will then rise. The end of ultra-cheap money in the United States threatens buoyant equity and commodity markets too — but they get an offsetting benefit from the growth that is driving monetary tightening. With these markets rightly signaling global recovery, the precious metals bubble looks set to be pricked before long.”

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