Tuesday, November 01, 2005
Gold Markets Reaction To Rate Hike 'Muted'
Market Watch has the gold markets reaction to the Fed hike. "Gold futures held their ground above the $460-an-ounce level in electronic trading Tuesday after the Federal Reserve once more raised U.S. interest rates by a quarter of a percentage point."
"'All the changes coming for the Fed leave for a lot of uncertainties and that is something that gold often rallies on the back of, this time around it could be an exponential increase,' said veteran commodities trader Kevin Kerr."
"At the same time, gold is testing the $460 level and may fall a bit further, he said. 'The yellow metal seems to snap back just as quick as it sees profit taking though, so the short side of the market needs to be cautious,' he said, adding that 'traders need to see gold at these levels as a gift that we may not see for some time again.'"
"So far, 'after proving to be tough resistance on several different occasions, the $455-$460 area [for gold] is now being tested to see if it has become key support,' said Peter Grandich."
"Grandich said the level will likely hold 'as all the fundamentals that led gold to its most recent highs remain in force, strong physical and investment demand, increasing geopolitical concerns abroad and within the U.S., and as an alternative asset class versus stocks and the bubble-breaking real estate market,, he said."
"December silver closed down 11 cents at $7.47 an ounce while December copper added 0.5 cent to finish at $1.816 a pound. The January contract for platinum closed down $14.80 at $928.40 an ounce after ending October with a gain of nearly $8. December palladium finished the session at $223.40 an ounce, down $3.75."
"'All the changes coming for the Fed leave for a lot of uncertainties and that is something that gold often rallies on the back of, this time around it could be an exponential increase,' said veteran commodities trader Kevin Kerr."
"At the same time, gold is testing the $460 level and may fall a bit further, he said. 'The yellow metal seems to snap back just as quick as it sees profit taking though, so the short side of the market needs to be cautious,' he said, adding that 'traders need to see gold at these levels as a gift that we may not see for some time again.'"
"So far, 'after proving to be tough resistance on several different occasions, the $455-$460 area [for gold] is now being tested to see if it has become key support,' said Peter Grandich."
"Grandich said the level will likely hold 'as all the fundamentals that led gold to its most recent highs remain in force, strong physical and investment demand, increasing geopolitical concerns abroad and within the U.S., and as an alternative asset class versus stocks and the bubble-breaking real estate market,, he said."
"December silver closed down 11 cents at $7.47 an ounce while December copper added 0.5 cent to finish at $1.816 a pound. The January contract for platinum closed down $14.80 at $928.40 an ounce after ending October with a gain of nearly $8. December palladium finished the session at $223.40 an ounce, down $3.75."
# posted by Ben Jones @ 3:06 PM 
