Gold range traded overnight from $1,099/oz to $1,103/oz but it has since moved up some 1.7%. Gold is currently trading at $1,112.00/oz and in euro and GBP terms, gold is trading at €775/oz and £688/oz respectively.
Gold is stronger today due to the weaker dollar and positive Chinese economic data which bodes well for demand for gold in China as we approach the Chinese New Year. Also supporting gold are higher oil prices due to the cold winter in the northern hemisphere and the Russia-Belarus oil row. While talk of a Russian threat to European oil and gas supply is exaggerated, it is a reminder that geopolitical risks remain.
Traders will look to US manufacturing data today and employment data later in the week for cues. Demand remains robust below $1,100/oz with many willing to buy on the dip at these levels. Many of the fundamentals reasons for gold's 25% rise in 2009 remain in place - quantitative easing, competitive currency devaluation, sovereign debt risk, inflation and interest rate risk and geopolitical risk. These risks look set to remain for 2010 and thus gold's fundamentals remain sound.
Silver traded between $16.90/oz and $17.05/oz overnight. Silver is up by over 1.5% and is currently trading at $17.10/oz, €11.92/oz and £10.58/oz.
Platinum Group Metals
Platinum is trading at $1,490/oz and palladium is currently trading at $418/oz. While rhodium is at $2,550/oz.
Palladium has surged by over 3.5% and platinum by over 2% on an increasingly favourable view for commodity prices for 2010. The launch of the platinum and palladium US ETFs will likely lead to a substantial increase in investor demand which should lead to higher prices as it did for the US gold and silver ETFs.