Gold and silver fell yesterday (1% and nearly 4% respectively) as strength in the dollar and increasing risk appetite, as seen in rising equity indices, saw the precious metals come under pressure.


Demand remains strong despite the slight fall in the holdings of the SPDR Gold Trust (world€™s largest gold ETF), whose holdings fell 0.7% from the previous day (down 0.7 percent or 8.25 tonnes to 1,119.43 tonnes as of April 16). But demand in India has resumed for the Hindu festival of Akshaya Tritya (considered an auspicious time to buy gold) and while not spectacular is robust nevertheless. This should provide some support for gold at around the $850/oz level.


Support is at the 200 day moving average of $869/oz for the June future and $865/z for the continuous rolling contract and a breach of these levels will likely see technical selling down to the $850/oz level. The short term trend remains down and momentum traders are as ever €˜making the trend their friend€™. Further consolidation seems necessary prior to a challenge of the stubborn resistance at $900/oz.