US stocks rallied yesterday and the gold price soon recovered after initial falls, and resolutely stayed around the $990/oz level. The erratic nature of the dollar, at the moment, means that gold may still have its direction dictated by dollar volatility and traders may exploit this and push the limits of gold support in the short term, looking for favourable entry points. If gold continues to hold above $990/oz it will show that gold has the maturity to de-couple itself from short term influences. Jitters over Iran led to higher oil prices yesterday and there are prospects of new tough sanctions against Iran if Thursday's meeting of the UN Security Council and Germany (the so-called P5+1 - US, UK, France, China, Russia and Germany) yields little progress. Analysts realise that should this geopolitical risk escalate, gold is likely to react positively.
Silver pushed back above the $16/oz level and is currently trading at $16.17/oz.
Platinum group metals
Platinum had a very quiet night on the Shanghai Gold Exchange and appears to be at the mercy of Chinese demand at the moment. It is currently trading at $1,277/oz, palladium is trading at $296/oz and rhodium is at $15,75/$1,675/oz.