Fundamental Precious Metals (2011-04-08)

<h3>Gold sets new record high amid inflation acceleration</h3>
By @ibtimes on

Gold sets new record high amid inflation acceleration

Gold started Friday's trading in a positive tone, setting new highs a day after the ECB hiked rates to control inflation in the continent.

Bullion for immediate delivery rose to 1,466.31 an ounce, compared with the opening levels of 1,457.85, while setting a high of 1,466.87 and a low of 1,456.27. Futures rose 0.58% to trade at $1,467.800 an ounce.

Investor's desires to hedge against inflation forced the metal to set new record at $1,46.87 an ounce, where fears of inflation intensified after China hiked rates for the third time this year, while price acceleration in Europe was noted during the past period to surpass the desired rate set by central banks in the continent.

The US dollar index, which tracks the performance of the currency against six-majors, traded at 75.21, compared with the opening levels of 75.53 while setting a high of 75.60 and a low of 75.17. Gold usually moves inversely with the dollar as commodities are a dollar weighted index.

The ECB hiked rates by 25.0 basis points as expected in April's meeting, for the first time in almost three-years, aiming to control inflation in the area. BoE left the key lending rate unchanged during April despite that inflation rose in March by 4.4 percent from the previous 4.0 percent reported a month earlier.

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

Gold's trading remains above the support at 1,425.00 an ounce, where if breached it will pave the way for the pair to test the support at %1,410.00 an ounce, but the general trend remain to the upside with initial targets set at 1,480.00 an ounce and probably achieve new historic highs above those levels.

The S&P GSCI index closed trading at 745.01; gaining by 2.92 points, while the RJ/CRB commodity index closed at 364.48, after gaining 1.02 points.

Major Metal Fixing

As for metal Fixes (Apr 7); Gold fixed at AM Fix was set at $1,456.50 an ounce while the PM fixing (Apr 7) was set at $1,459.50 an ounce; meanwhile silver fixing was set at $39.51000 an ounce and Platinum AM Fixing (Apr 7) was set at $1,787.00 an ounce, and at 1,780.00 an ounce during the PM fixing (Apr 7); finally ending with Palladium AM fixing set at $784.00 at (Apr 7) AM fixing, while the PM fixing (Apr 7) was set at $778.00 an ounce.

Other Metals

Silver for immediate delivery traded at $40.10 an ounce compared with the opening levels of $39.63 an ounce, while setting a high of $40.13 an ounce and a low of $39.49 an ounce. Silver future contracts traded lower by 1.49% or 0.588 to trade at 40.140 an ounce

Platinum for immediate delivery traded lower by $18.0, at $1,793.000 an ounce, while Palladium rose by $17.00 to trade at $782.00 an ounce.

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