Gold rose in early trading Wednesday despite the decline in exchange-traded products (ETP) that reached the lowest in two-years, on speculation that global recovery is gathering momentum.
Investors took advantage of low metal prices to invest while the slight increase in the value of the dollar against majors failed to prevent the metal from rising.
The US dollar index, which tracks the performance of the dollar against six-majors, rose on the daily scale to trade at 77.88, compared with the opening levels of 77.86 where it managed to reach a low of 77.81 and a high of 78.01.
The inverse relationship between gold and the dollar failed to prevent the precious metal from rising over the daily scale where the precious metal's currently trading at 1,338.06 an ounce, compared with the opening levels of 1,332.17 while setting a high of 1,338.10 and a low of 1,330.72. Gold futures rose 0.32% as it added $4.200 to trade at 1,336.500 an ounce.
Major Market Movers
Today's report from the BoE will probably show a split decision by members regarding the latest rate decision that took place nearly two weeks ago, where speculations suggest that member Sentance called for rate hikes while Posen probably called for APF purchases increase by £50.0 to support growth. The monetary stance of the bank was left unchanged for the 24-consecutive month at 0.50 percent interest rate and £200.0 billion of APF purchases
UK's economy contracted during the fourth-quarter of 2010 by 0.5%, compared with 0.7% expansion that was reported in the previous quarter and opposing market's expectations of 0.5% expansion.
Assets in ETP fell by 31.0 metric tons, reaching 2,043.09 tons, marking the biggest drop in two-years. The IMF said yesterday that global growth will hover near 4.4 percent this year, compared with earlier outlook that suggested an expansion of 4.2 percent.
The Standard Chartered PLC report on commodities, released yesterday said Strong economic data has improved confidence about the global outlook and reduced the need to hold gold and silver as a safe haven against credit risk, event risk and currency weakness, adding that We expect further weakness in both markets.
Talking about metal Fixes (Jan 25), we witnessed a drop in Gold fixes as the AM Fix was set at $1,326.00 an ounce, while the PM Fix was set at $1,324.00, meanwhile silver fixing was set at $26.700000 an ounce and Platinum AM Fixing was set at $1,787.00 an ounce that remained unchanged by the PM fixing, finally the Palladium AM fixing was set at $786.00 at the AM fixing while being set by PM fixing at $786.00 an ounce.
Silver for immediate delivery traded higher on the daily scale, at 27.08 an ounce, which is also the highest so far. This is compared with the opening levels of 26.81, which marks the lowest levels recorded today. Silver future contracts traded higher by 0.82% or 0.220 to trade at 27.025 an ounce
Platinum for immediate delivery traded higher by $23.00, at $1,799.00 an ounce, Palladium inclined by $18.50 to trade at $795.50 an ounce.
Technical Analysis for Gold
The metal touched the PRZ of the harmonic formation at 1322.00, where it inclined stabilizing above these levels. Presently, we might witness a temporal bullishness as the pattern is bullish. If the butterfly pattern is assured, the entire bearishness might be stopped at 1298.00; henceforth, we will startobserving the price behaviors of achieving a potential upside recoverybut we need further confirmation that the PRZ of 1322.00 is the point or we may visit 1298.00 first before seeing this reversal.