Gold extend its rise for the second day
Gold spots moved to higher grounds, extending yesterday's rise as the dollar weakened and demand for hedging against inflation intensified among investors.
Bullion for immediate delivery rose to 1,461.46 an ounce, compared with the opening levels of 1,457.10. Futures gained 0.56% to trade at $1,463.800 an ounce.
Investor's desires to hedge against inflation forced the metal to set new record at $1,476.30 an ounce on April 11, 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.
Inflation expectations have been rising in China even as the central bank hiked rates. The Chinese economy has been growing at a 20% rate over the past period, and much of that is tied to inflation that has entered a crisis territory where inflation currently stand at double-digits for many products and services in the country.
Investors believe that China's central bank will need to hike rate by at least 3.0 percent to curb inflation.
The ECB hiked rats last week by 25 basis points, taking the interest up from the record low of 1.0% to 1.25 percent. 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.
The US dollar index, which tracks the performance of the currency against six-majors, traded at 74.70, compared with the opening levels of 74.95 while setting a high of 75.07 and a low of 74.61. Gold usually moves inversely with the dollar as commodities are a dollar weighted index.
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 1,445.00 an ounce, where if breached it will pave the way for the pair to test the support at %1,425.00 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 735.25; gaining by 4.62 points, while the RJ/CRB commodity index closed at 359.55, after adding 0.50 points.
Major Metal Fixing
As for metal Fixes (Apr 13); Gold fixed at AM Fix was set at $1,458.00 an ounce while the PM fixing (Apr 13) was set at $1,457.50 an ounce; meanwhile silver fixing was set at $40.22000 an ounce and Platinum AM Fixing (Apr 13) was set at $1,783.00 an ounce, and at 1,786.00 an ounce during the PM fixing (Apr 13); finally ending with Palladium AM fixing set at $771.00 at (Apr 13) AM fixing, while the PM fixing (Apr 13) was set at $773.00 an ounce.
Silver for immediate delivery traded at $41.05 an ounce compared with the opening levels of $40.61 an ounce, while setting a high of $41.36 an ounce and a low of $40.43 an ounce. Silver future contracts traded higher by 2.72% or 1.093 to trade at 41.330 an ounce
Platinum for immediate delivery traded higher by $12.0, at $1,775.000 an ounce, while Palladium rose by $8.0 to trade at $764.00 an ounce.