London, 03 September 2009 - Gold rallied to its best in almost 3-months Wednesday, testing briefly above $980/oz as concerns about the US financial sector and of possible regulatory restrictions in energy trading triggered a surge of safe-haven demand. Silver was also upbeat, rising 2.25% while platinum and palladium reversed earlier weakness to close unchanged. The rest of the commodity sector was less buoyant with the CRB Index rising just 0.25% while NYMEX crude was unchanged closing at $68.05. The rally in gold also triggered a rallying in EUR/USD while the USD Index declined 0.5%. US equities finished with small declines with both the Dow and S&P off 0.3% while markets are mixed overnight with the Nikkei currently down 0.6% and the HSI up 1%. The focus today will be the ECB rate announcement and accompany statement while economic data will show Eurozone, UK and US Services PMI and US Jobless Claims.
Gold saw a relatively flat start to the day trading between $951.75-56.25 across Asia and Europe. The metal rallied initially on the US opening, pushing to $967 as some 5000-lots - rumoured to be Central Bank related - were bought on COMEX, before gold surged again around 2-hours later as short covering was triggered. The metal closed at $976.80 and hit a 3-month high of $980.70 in after-market trade. Some light profit taking has been seen this morning but gold remains supported and could look to extend its gains to challenge the June high of $990.20 as concerns of a possible equity correction prompts fresh diversification into safe-haven assets.
Silver closed Wednesday at $15.35 shortly after posting a high of $15.48 and has rallied to $15.56 this morning. The metal may now get a further boost after the AU/AG ratio broke 63.02 this morning with momentum indicators suggesting a re-test of June $16.25 high.
Both platinum and palladium succumbed to long liquidation during European trade before recovering on the back of rallies in gold and silver. Platinum recovered from a low of $1205 to close up $1 at $1230 while palladium settled unchanged at $287 after posting a low of $281. For the moment platinum should hold the current $1218-75 range while increased investment demand for palladium still has the potential to test the $296-305 area. ETF Securities flows were mixed yesterday - platinum holdings declined 1.9Kozs, palladium increased 4.6Kozs to a record 408.8Kozs.
Published on Thu, Sep 3 2009, 07:55 GMT
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