The knee jerk
reaction to the Chinese interest rate rise was an increase in risk aversion
which saw falls in equity and commodity markets and this contributed to gold
falling more than 2%. Poor earnings results also contributed to the weakness
in equities. Gold's weakness was also likely due to the dollar rising and to
profit taking after gold's recent gains. Support is at $1,325/oz and
$1,300/oz and resistance is at $1,374/oz and the record nominal high of
$1,385/oz (see chart below).
Gold is currently
trading at $1,341.75/oz, €970.39/oz, £853.82/oz.
While European stock
markets have not followed their US and Asian counterparts lower, risk
aversion is being seen in currencies where the dollar has given up some of
yesterday's gains and sterling has fallen after Britain's public borrowing
hit a record high in September. Public borrowing rose to £15.6bn for
the month while analysts had expected to show a fall in borrowing to £14.2bn.
The pound slid to $1.57 in the wake of the worse than expected figure and
sterling fell to £853/oz from £848/oz against gold.
in USD - 30 Days.
The still deteriorating
fiscal positions of many major industrial economies should lead to higher
gold prices in all fiat currencies. The lack of international cooperation and
the growing tensions over competitive currency devaluations is another
concern. These tensions could lead to protectionism which is another real
risk which it would be wise not to ignore.
Silver is currently
trading at $23.71/oz, €17.14/oz and £15.08/oz.
Platinum is trading
at $1,673.00/oz, palladium is at $579/oz and rhodium is at $2,175/oz
O'Byrne is the Managing Director of Goldcore, Ireland's Asset Diversification
and Wealth Preservation Specialist. He is regularly quoted and writes in the
financial media and was awarded Ireland’s prestigious Money Mate and
Investor Magazine Financial Analyst of 2006.
You can contact him by calling : the GoldCore
Bullion Services Team on
(Irl)+353 1 632
(UK)+44 203 086 9200
(US) +1 (302)635 1160