The gold market continues to track the dollar. As the dollar retraces recent gains against the major currencies, touching a two week low on Monday, gold currently stands at $961.10. With many FX analysts currently holding a medium-term bearish view on the dollar, the outlook remains positive for gold. The next resistance level for gold is at $968 followed by $983. Support is currently at $941 & $935.
In other news South Africa, the World's third largest gold producer after the US and China, has published a production figure of 49.71 tons of gold for the first quarter of 2009. This represents a fall of 4.8% on the first quarter last year. This decline is expected to continue due to a push by the South African Government to focus on safety, electricity and skills shortages within the industry. If this exercise is carried out successfully It is expected that production will increase significantly from 2014 onwards, however in the meantime it will continue to put constraints on the supply of this precious metal.
Silver encountered key support yesterday at $14.75 ahead of a major support level of $14.60. Again, silver touched a two week low last Monday tracking gold. Next resistance $15.50.
Platinum Group Metals
Platinum is continuing its upward trend currently trading at $1,270. Positive news for the PGMs in general has emerged in various forms over the last few days. China announced stronger than expected vehicles sales for May. These strong numbers were attributed to a Government stimulus package. In South Africa, the second largest producer of platinum, mineworkers at the Impala Platinum mine are looking for a 20% increase in wages through their union. Such a sudden increase in wages would not only lead to increased cost of production but if not approved strikes could be on the cards - affecting all precious metal mines.