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Gold Challenges Resistance at $1,750/oz – Technicals and Fundamentals Remain Very Positive

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Published : February 02nd, 2012
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Category : GoldWire

 

 

 

 

Gold’s London AM fix this morning was USD 1,747.50, EUR 1,326.68, and GBP 1,102.80 per ounce. Yesterday's AM fix was USD 1,744, EUR 1,327.65, and GBP 1,106.74 per ounce.



Cross Currency Table - Bloomberg


Gold has seen quite volatile up and down trading in Asia and Europe but within a narrow $10 band.


It saw gains initially in Asia to $1,752/oz before a retracement to $1,744/oz. It then rose to $1,750/oz again as Asian trading closed.


Early European trading saw gold quickly fall from over $1,750/oz to below $1,746/oz prior to a quick reversal and gold reaching an eight week high at $1,753.45/oz.


Resistance is at $1,750/oz and there appears to be a determined seller at these levels.



Gold Spot $/oz  - 2 Days (Bloomberg)


However, the short term technicals are positive with a series of higher lows and higher highs. 


Gold has risen to 8 week highs despite positive manufacturing data, higher factory activity in Germany, China and the US and the hope that a Greek debt restructuring solution is imminent.


Demand for physical in Europe, Asia and internationally remains robust which is supporting gold. 


Investors will today watch the US weekly jobless claims data for the week ending January 28th.


Adding to the very gold supportive interest rate backdrop, Japan's finance and economic ministers are putting pressure on the Bank of Japan to consider easing monetary policy even further.


Negative yields on some bonds (such as TIPS) are very gold positive as is moves to let investors buy short term bills with negative yields.  


Gold is also being supported by central bank buying. Russia's gold and foreign exchange reserves rose to $504 billion in the week to Jan. 27 from $499.7 billion a week earlier.


Knowledgeable industry participants continue to be bullish on gold.  


Newcrest Mining, the world's third largest gold producer, expects gold to trade as high as $2,500 an ounce and retain its safe harbour status for as long as the world's financial system remains in crisis.


Newcrest chief executive Greg Robinson said today that gold will remain a hedge against a global financial breakdown, citing risks such as a devaluation of the U.S. dollar, today’s global currency, European economies in dire shape and persistent political tensions throughout the globe.


Bank of America Merrill Lynch said today that gold bullion may reach $2,000/oz in Q4, up from a 1Qtr estimate of $1,850.


For breaking news and commentary on financial markets and gold, follow us on Twitter.


SILVER 


Silver is trading at $33.72/oz, €25.66/oz and £21.30/oz. 


PLATINUM GROUP METALS 
Platinum is trading at $1,618.00/oz, palladium at $689/oz and rhodium at $1,400/oz. 


(Bloomberg) -- China’s demand for gold will continue to rise on growing incomes and investment against inflation, Albert Cheng, World Gold Council’s managing director for the Far East region, says in email. Given the country’s “strong affinity to gold” and record imports in November, this year is “set to be a strong year” in a part of a longer-term trend, Cheng says


(Bloomberg) -- Turkey’s gold imports were 2.96 metric tons in January, the Istanbul Gold Exchange said on its website today. Silver imports were 4.2 tons last month, the data show. Holdings rose from 4.4 million ounces in October and 3.7 million ounces in September, according to the data. In September and November, Turkey’s central bank increased the proportion of required reserves that commercial banks can deposit in gold. The changes have increased the amount of gold Turkey declares in its official reserves.


(Bloomberg) -- Iran has $120 billion in foreign currency reserves and 907 tons of gold, the Tehran Times reported, citing Yahya Ale-Eshagh, who heads the Tehran Chamber of Commerce, Industries and Mines.


The gold reserves have a total value of $17.5 billion, the newspaper cited Ale-Eshagh as saying. Iran has “no shortage” of foreign currencies or gold to meet domestic demand, he said.


Ale-Eshagh said recent fluctuations in the gold and currency markets were a result of mismanagement by some state bodies; he called for tighter monetary control by the government, according to the report.


NEWS


(Reuters)
Gold rises to 8-week high, firm euro supports


(Reuters)
Gold in a bubble? Not in Europe, where public can't sell fast enough


(Reuters)
Economic woes could push gold to $2500-Australia's Newcrest


(CNBC)
Fed's Low Rates Killing Credit, Slowing Recovery: Gross


(BusinessWeek)
California Will Borrow Up to $1 Billion to Skirt Cash Crisis


COMMENTARY
(ZeroHedge)

Bill Gross Explains Why "We Are Witnessing The Death Of Abundance" And Why Gold Is Becoming The Default "Store Of Value"


(Max Keiser)
The Historical Case For $960 Silver


(Benzinga)
Central Bankers Weaken Their Currencies, Boost Gold


(The Economic Collapse Blog)
34 Shocking Facts About U.S. Debt


(RT)
Chinese 'gold rush': Country diversifying assets


(Ludwig Von Mises Institute)
Currency Wars


Mark O’Byrne

Goldcore

 

 

Companies Mentionned : Newcrest | Platinum Group Metals | Robust |
Data and Statistics for these countries : Russia | Turkey | All
Gold and Silver Prices for these countries : Russia | Turkey | All
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Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
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Latest comment posted for this article
It appears the new bench marks for gold and silver are $ 1700 and $ 33 on the upside. Yes, gold will get to $ 1800 but not before experiencing sub $ 1700. Silver just traces gold's path. At 11% monthly gain, it may not be imprudent to book some profit an  Read more
Papli - 2/3/2012 at 12:10 AM GMT
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It appears the new bench marks for gold and silver are $ 1700 and $ 33 on the upside. Yes, gold will get to $ 1800 but not before experiencing sub $ 1700. Silver just traces gold's path. At 11% monthly gain, it may not be imprudent to book some profit and buy later on dips. PMs are following a cycle not too seriously guided by world events that just keep happening. When there is too much noise it is better to wear the ear phones.

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