Iran’s rejection to halt its Uranium enrichment programme resulted in gold and silver edging higher. Iran gave the strongest indication yet that it would reject international calls to scale back its nuclear programme, intensifying the long-running controversy over its ambitions and nudging world oil prices higher. Comments by Ayatollah Ali Khamenei, Iran’s supreme leader, which suggested such a rejection, prompted President George W. Bush to call for a firm response by the United Nations in the wake of any Iranian refusal. Iran had restricted UN inspectors’ access to the country’s nuclear site of Natanz. But it was unclear whether the reduced access amounted to a violation of Tehran’s international obligations.
The US dollar is also weaker on expectations that future economic numbers from US will show a slowdown in US economy and that the US dollar will weaken further. Euro so far has not been to able to break 1.30 and once it breaks and holds 1.30 euro could target 1.33. A weaker US dollar always supports gold and silver prices.
There is lack of major market moving news apart from Iran. We continue to maintain $84.00 as the near term price target for crude oil on expectations that the Iran will not halt its nuclear enrichment and UN could impose sanctions on Iran. Higher crude oil prices will imply higher gold, silver and other precious metal prices.
GOLD -- DECEMBER FUTURE
Daily charts are showing a bullish divergence and gold should target $645.50 and $657. On the lower side $634.50 is the initial support with $627.50 and $623.80 as the key weekly support levels.
SILVER -- SEPTEMBER FUTURE
A break of $1259 will result in $1320 very quickly. On the lower side $1224 and $1212 are the initial support levels with $1188 as the key weekly support.
Happy Profitable Trading
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