Fundamental Precious Metals (2011-03-09)

<h3>Gold falls as concerns ease</h3>
By @ibtimes on

Gold falls as concerns ease

Gold followed the drop of oil as concerns from Libya's violence and inflation eased. Crude retreated from 29-month high, while gold returned to trade near the pivot level of 1,425.00 an ounce.

Bullion for immediate delivery dropped for the third-consecutive trading session to $1,425.90 an ounce, compared with the opening levels of $1,428.72 an ounce, while setting a high of $1,430.50 an ounce and a low of $1,422.87 an ounce. Futures gained 0.01% to trade at $1,427.300 an ounce.

Oil retreated as Kuwait's oil minister said that OPEC to hold an urgent meeting to determine a new quota for production in order to ease concerns about Libya's unrest that offset trading in oil and sent the black metal above $100.0 a barrel.

Currency fluctuation and inflation concerns drove the precious metal to gain more than 30 percent in 2010, while pushing the metal to record an all time record at $1,444.75 on March 3, 2011.

Tomorrow's BoE decision on rates would shed the light on inflation in UK, along with the bank's outlook for prices that continues to hover at double the BoE's desired rate of 2.0 percent.

On the other hand, Analysts predict that the Fed will keep its rates near record low of 0.0%-0.25%, which would send the dollar to depreciate further, accordingly, providing another supporter for gold to ascend due to the inverse relationship between commodities and the dollar as they are a dollar weighted investment tools.

Inflation threats across the world also drove the metal higher, where recently; China and Indonesia, raised rates this year, in effort to limit the inflation bubble and cool growth. The US Commodity Futures Trading Commission said that hedge-fund managers increased their net-long positions in NY gold futures during the week ending March 1.

Inflation in Europe doesn't look so promising either, where ECB's rate decision last week hinted for the possibility of raising rates in April's meeting as inflation continue to tamper with recovery. Euro-Zone flash estimate for February recorded a rise of 2.3% in prices, compared with 2.4% in January.

The S&P GSCI index closed trading at 713.36, lower by 5.86 percent, while the RJ/CRB commodity index closed at 361.09, after dropping 1.80 percent.

Cocoa futures sealed yesterday's trading session at 3,633.00 per metric ton as it lost 0.79%. Brent Crude futures lost 0.46% as of 02:17 EST, to fall to $112.540 a barrel.

The dollar fell against the euro to the lowest level in four-months, sending the US dollar index, which tracks the performance of the currency against six-majors, to retreat and trade at 76.826, compared with the opening levels of 76.871.

Technically speaking, the metal's trend remains to the upside as far as the support at $1,390.00 an ounce remains intact, while the 100-day MA support level is set at 1,374.00 an ounce.

Gold's trading remains above the support at 1,410.00 an ounce, where if breached it will pave the way for the pair to test the support at %1,400.00 an ounce, but the general trend remain to the upside with initial targets set at 1,440.00 an ounce and probably return to trade near the achieved record around $1,460.00 an ounce.

Major Metal Fixing

As for metal Fixes (Mar 8); Gold fixed at AM Fix was set at $1,435.00 an ounce while the PM fixing (MAR 8) was set at $1,426.25 an ounce; meanwhile silver fixing was set at $37.370000 an ounce and Platinum AM Fixing (Mar 8) was set at $1,815.00 an ounce, and at 1,808.00 an ounce during the PM fixing (Mar 8); finally ending with Palladium AM fixing set at $789.00 at (Mar 8) AM fixing, while the PM fixing (Mar 8) was set at $781.00 an ounce.

Other Metals

Silver for immediate delivery traded at $35.90 an ounce compared with the opening levels of $35.99 an ounce, while setting a high of $36.15 an ounce and a low of $35.79 an ounce. Silver future contracts traded higher by 0.79% or 0.282 to trade at 35.940 an ounce

Platinum for immediate delivery traded lower by $4.50, at $1,796.00 an ounce, while Palladium gained by $3.50 to trade at $789.00 an ounce.

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