Fundamental Precious Metals (2011-03-14)

<h3>Gold ascends on Libya concern, Japan earthquake</h3>
By @ibtimes on

Gold ascends on Libya concern, Japan earthquake

Gold added more gains to Friday's bullish movement, to return on trading near the pivot level at $1,425.000 an ounce, as investors sought safety amid Libya's violence and Japan's biggest earthquake on record.

Bullion for immediate delivery rose in trading to $1,424.45 an ounce compared with the opening levels of $1,419.70 an ounce, while setting a high of $1,431.72 an ounce and a low of $1,418.20 an ounce. Futures gained 0.16% to trade at $1,424.100 an ounce.

Libya's violence continues to influence trading, pushing investors to target safe haven assets, aiming to preserve their wealth. Oil rose slightly, as Japan's earthquake may limit demand for energy. Note that Japan is the world's third largest oil consumer after the US and China.

The US dollar index, which tracks the performance of the currency against six-majors, traded at 76.628, compared with the opening levels of 76.695, where it managed to set the highest at 76.699 and the lowest at 76.611.

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.

Bank of Korea's hiked rates last week to 3.0 percent, while New Zealand Central Bank slashed rates to the lowest level on record to 2.5 percent, meanwhile the BoE sustained the lowest rate on record at 0.50 percent. This is compared with statements by ECB officials that board members may consider raising rates as soon as April in effort to tackle elevated inflation levels in the 17-nation economy.

The Euro lost grounds against the dollar, but analysts predict that the Fed will keep its rates near record low at 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.

The S&P GSCI index closed trading at 701.06; lower by 6.13 percent, while the RJ/CRB commodity index closed at 351.88, after dropping 2.57 percent.

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 1,400.00 an ounce, where if breached it will pave the way for the pair to test the support at %1,390.00 an ounce, but the general trend remain to the upside with initial targets set at 1,425.00 an ounce and probably return to trade near the achieved record around $1,445.00 an ounce.

Major Metal Fixing

As for metal Fixes (Mar 11); Gold fixed at AM Fix was set at $1,409.75 an ounce while the PM fixing (MAR 11) was set at $1,411.50 an ounce; meanwhile silver fixing was set at $34.1000 an ounce and Platinum AM Fixing (Mar 11) was set at $1,768.00 an ounce, and at 1,777.00 an ounce during the PM fixing (Mar 11); finally ending with Palladium AM fixing set at $756.00 at (Mar 11) AM fixing, while the PM fixing (Mar 11) was set at $754.00 an ounce.

Other Metals

Silver for immediate delivery traded at $35.80 an ounce compared with the opening levels of $35.92 an ounce, while setting a high of $36.48 an ounce and a low of $35.49 an ounce. Silver future contracts traded lower by 0.32% or 0.115 to trade at 35.820 an ounce

Platinum for immediate delivery traded lower by $29.0, at $1,746.50 an ounce, while Palladium dropped by $7.0 to trade at $747.50 an ounce.

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