GoldCore's  Instablog

Gold
Gold touched $1,211.72/oz overnight but has since pulled back. Gold is currently trading at $1,203.70/oz. In EUR and GBP terms it is trading at €799.11/oz and £724.34/oz respectively.

Gold has fallen nearly $20 per ounce from its recent record highs (nominal highs at $1,226/oz and has taken a well earned breather. Tentative dollar strength and further oil weakness has seen traders take profits and there is continuing nervousness about the sustainability of the recent sharp rise in prices. Momentum traders will likely continue to make the trend their friend until we get a lower weekly close. This does not look like happening today unless we get a very sharp selloff and fall below last week’s close at $1,176.70/oz.  Caution before the US unemployment figures today is seeing weakness in equity markets. Poor unemployment figures could lead to gold weakness in the short term but should lead to further safe haven demand on concerns about a double dip recession. Especially as there are growing concerns about further sovereign defaults such as in Greece and deteriorating commercial property markets (particularly in the UK and US) internationally.

Silver
Silver touched $18.90/oz overnight. Silver is currently trading at $18.77/oz, €12.46/oz and £11.29/oz.

Platinum Group Metals
Platinum is trading at $1,477.50/oz and palladium is currently trading at $379/oz. While rhodium is at $2,400/oz.

Gold
Gold reached a new nominal high overnight of $1,226/oz. Gold is currently trading at $1,218.40/oz and in euro and sterling terms, gold is trading at €807/oz and £732/oz respectively.

Gold may be overbought in the short term but in bull markets with strong fundamentals, markets can remain overbought for long periods of time as was seen in the 1970s. There are many institutional and central bank buyers on the sidelines at these prices but they will provide strong support with many waiting to buy on the dips. The recent sanguine reaction of markets to the Dubai default and buoyancy in equity markets has led to leveraged players returning to the futures market and this in conjunction with the strong physical demand from more risk averse investors and central banks means that there will likely be more diversification into gold in 2010.

December is seasonally a strong month for gold with jewellery demand for Christmas and then the increasingly important Chinese New Year demand and this means that any price correction is likely to be reasonably shallow. However, volatility may likely increase and a pullback of some 10% is quite possible.

Silver
Silver went as high as $19.38/oz overnight but it has experienced a slight pullback this morning. Silver is currently trading at $19.22/oz, €12.72/oz and £11.53/oz.

Platinum Group Metals
Platinum is trading at $1,502/oz and palladium is currently trading at $394/oz. While rhodium is at $2,625/oz.

Gold
Gold reached a new nominal high overnight of $1,216.73/oz. Gold is currently trading at $1,214.40/oz and in euro and sterling terms, it is trading at €804/oz and £731/oz respectively.

Gold reached new record nominal highs over $1,215/oz this morning as the dollar continued to weaken and wider fears of competitive currency devaluations and the debasement of currencies leads to long term inflationary fears. Concerns that markets may be underestimating the risk of contagion posed by the Dubai sovereign default are likely supporting gold at these levels and leading to safe haven demand. Gold's 'perfect storm' is also being aided by continuingly elevated oil prices, geopolitical risks and concerns about the vitality of the recent economic recovery.

The Commitment of Traders gold data is important and shows that there is a record short/long position but it is important to note that actual Open Interest is not at record levels yet which suggests that there is room for gold to advance higher prior to a correction and consolidation.

Silver
Silver went as high as $19.35/oz overnight but it has experienced a slight pullback this morning. Silver is currently trading at $19.22/oz, €12.72/oz and £11.57/oz.

The Commitment of Traders silver data is also significant. It shows that there is a record short/long position but it is important to note that actual Open Interest is not at record levels yet which suggests that there is room for silver to advance higher and reach its recent record nominal highs (as gold has done) over $20/oz in the coming weeks.

Platinum Group Metals
Platinum is trading at $1,497/oz and palladium is currently trading at $390/oz, while rhodium is at $2,725/oz.