Thursday, April 12, 2007


Gold Falls From "Key Technical Levels"

The Associated Press reports on currencies. "The euro fortified itself on recent gains against the dollar on Thursday, trading around two-year highs as the European Central Bank kept its interest rate steady and U.S. jobless claims hit a two-month high."

"The 13-nation euro bought US$1.3488 in afternoon European trading, up from US$1.3427 in New York late Wednesday. That put it at less than two U.S. cents short of its all-time high of US$1.3667, reached in December 2004."

"The euro was up amid the ECB's decision to keep its interest rate unchanged at 3.75 percent and Bank President Jean-Claude Trichet's tacit admission that it would likely lift the rate to 4 percent by June."

"The U.S. Federal Reserve has left rates unchanged over recent months even as the ECB steadily increased the cost of borrowing. The dollar was also hurt by worse-than-expected jobless claims in the U.S. which saw the number of Americans filing new claims for unemployment benefits reach a two-month high."

"That helped push the British pound up slightly to US$1.9791 from US$1.9753 and caused the dollar to fall to 119.01 Japanese yen from 119.30 yen."

From MarketWatch. "Gold futures fell in volatile trading Thursday, as traders locked in gains, shrugging off weakness in the dollar and strength in crude-oil prices. Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange."

"'Today's gold trading session was agonizingly lackluster as the metal tried to get its bearings, but was unsuccessful at either rising convincingly through the $682 price, or at falling under $670 per ounce,' said analyst Jon Nadler. 'Bullion has been repeatedly running into strong headwinds of resistance near the $682 area, despite continuing perceptions that the US dollar is on a basically one-way street lower,' Nadler said."

"'While the bullish trend remains intact, some traders feel that there may be a period of consolidation before gold prices manage to break resistance at $682 and the psychologically important $700 mark,' according to Action Economics."

"Other metals prices were mostly lower. May silver fell 3.5 cents to $13.855 an ounce, July platinum closed down $1.80 to $1,275.50 an ounce. June palladium bucked the trend, rising $4.75 to $374.30 an ounce."

From Reuters. "Palladium climbed to a new 11-month peak on Thursday and platinum touched its highest in nearly five months, buoyed by technical buying and positive momentum in the market."

"'Palladium's fundamentals are pretty poor. It's really a technical rally more than anything else,' said Robin Bhar, metals analyst at UBS Investment Bank. 'It's a small market and liquidity is poor. One can argue that it's easier to push up palladium than some other markets. We don't trust this rally and think it is unsustainable.'"

"Dealers said gold was supported by a weaker dollar but the metal struggled to break key technical levels."

"'The fundamentals remain positive for gold, but the market appears to lack conviction that the upside potential is not exhausted,' Dresdner Kleinwort said in a daily report."

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