-- Posted Wednesday, 10 October 2007 | Digg This Article | Source: GoldSeek.com
Gold Gold has continued to strengthen in Asian and early European trade. Gold was up $4.10 in New York yesterday, from $732.60 to $736.70. Gold was trading at $744.00/ 744.50 at 1200 GMT.
In Tokyo, the precious metals closed at their highs and Tocom gold futures reached a new 22 ˝ year high. Gold is again showing considerable strength, and further dollar weakness and oil strength is creating demand.
There is robust physical demand below $730 and there is significant buying on any dips in the gold price. Robust physical demand is seen in the Indian import duties as reported in Le Metropole Cafe which showed that "Indian ex-duty premiums were AM $3.17, PM $3.00, with world gold at $730.20 and $728.30. This is ample for legal imports. The rupee edged up to close at $1 =R 39.44 as the stock market surged on favourable political news: it closed up a stunning 4.51% at yet another record high. India appears very willing to buy world gold around $730." This suggests gold may go higher than many participants expect prior to an inevitable pullback. Further speculation that the Federal Reserve may once again cut interest rates is negative for the dollar and very bullish for gold.
The FT reports that Corporate America is braced for the worst period of economic uncertainty since the start of the decade as the credit squeeze and the housing meltdown heighten the risk of a U.S. slowdown. U.S. chief executives say the economic outlook has not been so difficult to read since the last recession in 2000-01. They warn that in spite of signs of a pick-up, the threat of an economic contraction is still alive.
Forex and Gold The USD has sold off quite aggressively Wednesday and is trading at 1.4144 and 2.044 against the EUR and GBP respectively.
As pointed out yesterday the dollar's recovery remains very tentative and it has actually weakened against commodity currencies and the Swiss Franc (CHF).
This morning the U.S. dollar is down to 78.35 (from 78.83 yesterday). Support is at its all time record low at 77.657. Below this is uncharted territory for the U.S. dollar.
Silver Spot silver was trading at $13.67/13.69 (1200 GMT) and it is trading in unison with gold if even slightly stronger. PGMs The PGMs are again showing strength and platinum is again knocking on the $1400 door. Platinum was trading at $1385/1390 (1200 GMT). Spot palladium was trading at $368/374 an ounce (1200 GMT).
Oil Oil prices inched higher Wednesday in Asia after rising sharply overnight on U.S. government predictions that a colder winter ahead will help lift worldwide demand for crude during the fourth quarter.
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