ពត៌មាននិងការព្យាករណ៏តំលៃមាស​សំរាប់ថ្ងៃ ២៩វិច្ជិការ

Gold Finished Lower as Stronger Dollar Reduced Precious Metal’s Demand

29 Nov 2010	1st resistance	2nd resistance	3rd resistance
Today’s resistance US$	1375	1387	1399
	1st support	2nd support	3rd support
Today’s support US$	1351	1339	1326
Today’s pivot point US$	1363

The Day’s Story:

Gold finished lower on Friday as stronger dollar reduced the demand of yellow metal as an alternative asset. Gold dropped by almost 2% earlier during the session but managed to pare most of its losses in aftermarket trading hours in a shortened U.S trading session. Gold sell off was triggered as tensions between Korean neighbors escalated. Geopolitical disasters are normally supportive for gold prices but euro weakness along with Shanghai exchange margin hike in metal futures kept gold prices under pressure for most of the session. Gold finished its week in green zone after two straight weeks of losses. Early losses in gold on Friday attracted bargain hunters to take advantage of latest dip in prices who helped gold to trim its losses later in the session. Meanwhile European debt problems remained in the backdrop and focus has started to shift from Ireland to other debt stricken European nations. Gold is already up by 25% this year and has outperformed stocks, currencies and most commodities this year. Gold has managed to rise 32 out of 47 weeks so far in 2010.

U.S market fell sharply as market marked an early close a day after Thanksgiving holiday. The blue-chip Dow Jones Industrial Average fell 95.28 points or 0.85% to 11,092.00 while S&P 500 index, a broader measure of the market, fell 8.95 points or 0.75% to 1,189.40 and NASDAQ shrank by 8.56 points or 0.34% to 2,534.56. Concerns about Chinese economy heating up due to inflationary pressure, military tensions on the Korean Peninsula, and Europe's debt woes weighed on US traders coming back from the Thanksgiving holiday. No significant data was on the cards from U.S on Friday so traders took their cues from European markets which also ended deep in red due to mounting debt fears in Portugal and Spain after bailouts in Greece and Ireland. Ireland finally agreed on a bailout package from IMF and Eurozone over the weekend.

We expect some sharp movements in gold price as market will have a lot of economic data to digest this week. Some of the major U.S. economic reports on the calendar this week include the Chicago Purchasing Managers Index and consumer confidence on Tuesday, the ADP private-sector employment report and Institute for Supply Management’s manufacturing survey Wednesday, jobless claims Thursday and the monthly jobs report and ISM service-sector survey Friday. The Friday Non-Farm payroll report which is the arguably the most

Important economic report for financial markets will give further clues about U.S jobs market which is still hovering near double digit unemployment rate despite official data indicating U.S economy out of the recession. Market is expecting non-farm payroll numbers to rise by 165,000 in November. Better than expected numbers could help stocks to resume their uptrend enabling bullion to tag along as well. A disappointing jobs figure could trigger safe haven buying interest in gold so gold may remain supported regardless of the outcome on Friday.

U.S. dollar index enjoyed decent gains to finish the week, sending European common currency to its 3 months low during the session. Dollar continued to benefit from worsening debt situation in Europe. Dollar index and spreads on peripheral euro zone bonds widened against the 10-year German Bund as investors focused on the possibility of euro zone debt crisis spreading to other debt stricken nations in European Union. Gold remained under pressure due to stronger greenback for most of the Friday’s session as inverse correlation between the two assets turned positive after erratic couple of weeks. Gold and Dollar move in opposite direction to each other due to their inverse correlation as dollar weakness enhances demand for dollar denominated assets as it makes them cheaper for holders of other currencies. Both however, can travel in the same direction at time of heightened economic uncertainty as was the case in first half of this year during Greece’s debt crisis. Similar trend has been seen during last few days as European debt crisis resurfaced. Adding fuel to fire was escalating military tensions between two Korean neighbors which boosted safe haven demand for both gold and greenback. Tensions between two neighbors have escalated over the weekend as South Korea started its military exercises with U.S. China has offered a six nations talks to resolve the matter but until situation calms down in Korean Peninsula, gold will remain well supported due to its status as a hedge against crisis

Gold price started its day with some losses on Friday and remained under selling pressure throughout Asian trading hours. Gold continued its downward journey as markets in Europe started their trading day. Gold’s losses were deepened as European session progressed and fell to its intraday low of $1350.9 an ounce just before the markets in U.S opened for a shortened session. Gold managed to pare almost half of its losses during this session and finished its day at $1363.2 an ounce with a weekly gain of just under 1% after two weeks of losses.

Other Metals:

Silver futures for December delivery closed down 83 cent to $26.70 an ounce on Friday.

Platinum futures for January delivery fell $13.20 to $1,645.20 an ounce on NYMEX.

Palladium futures for December delivery fell $18.90 to $676.50 an ounce.

N.Y. Copper for March delivery closed down 1 cent to $3.76 a pound on Friday.

Gold (News and Views):

      December Comex gold closed down $10.60 at $1,362.40 an ounce on Friday.

      The London P.M. gold fixing was $1,355.00 on Friday compared to its previous P.M fixing $1,373.25.

      The world’s largest gold exchange-traded fund, New York’s SPDR Gold Trust, said its holdings rose by 3 tons

      to 1285.084 tons on November 22 down from 1289.336.

      The dollar index, which measures the U.S. currency against a basket of six major currencies, rose by 0.66 To 80.35 on Friday.

      Crude Oil for December delivery fell $0.10 to $83.76 on Friday on New York Mercantile Exchange.

      Gold hit its true peak on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation in 1980 dollars, that translates to an all-time record of $2,184.08 an ounce, in 2010 dollars.

      The net length of managed-money accounts fell from 229,543 lots for futures and options combined on Oct. 12 to 173,067 as of Nov. 16, the cut-off date for the most recent weekly data from the Commodity Trading Futures Commission. This was the first drop below 200,000 since August.

      The Shanghai Futures Exchange will increase margins on gold, copper and aluminum after the market closes on Nov. 29 as China moves to curb speculation and damp inflation.

Factors Affecting Gold Price Yesterday:

“Normally the headlines from Korea and the lower stock market would help gold, but the weaker euro [is] helping the dollar counters,” said George Gero, metals analyst at RBC Wealth Management, in a note.

Standard Bank sees physical buying of gold on price pullbacks. Risk appetite at the moment appears limited ahead of the weekend. Furthermore, the market is illiquid on a Friday between the U.S. Thanksgiving holiday and a weekend, perhaps leading to more pronounced price moves, Standard says. Gold is one of the commodities on the defensive. “We continue to see net physical buying of gold, especially on dips,” Standard says. “We maintain gold in euro terms will outperform gold in dollar terms.”

“

The main negative factor (for metals) is the firm U.S. dollar, which has risen to its highest level in two months versus the euro,” wrote analysts at Commerzbank in a note to clients. “Furthermore, the increase in the margins for gold futures trading on the Shanghai Futures Exchange is also having an adverse effect.”

“We’ve had people move away from gold today as the euro weakened and the dollar strengthened,” said Bart Melek, global commodity strategist with BMO Capital Markets. “But I think there will be a reversal (higher in gold) even though I don’t expect the dollar to weaken materially at all. I think flows will move back into gold.”

“Bullion prices have been under pressure as a result of the decline in risk sentiment,” James Moore, an analyst atTheBullionDesk.com in London, said in a report. Gold may “remain underpinned by investment bargain hunting as investors look to diversify against the volatile macro-economic and geopolitical background,” he said.

"Gold is ... not really marching to any drum at the moment," said Simon Weeks, trader at London's Scotia mocatta. "I think it's just drifting in thin quiet Friday conditions as the currency markets move," he said, adding that bullion could head lower to between a $1,345 and $1,350 next week.

Gold Future Outlook:

LME base metals weakened, unable to maintain Friday’s gains, with market participants unable to “shake off persistent concerns” about the European debt situation and uncertainty about future Chinese monetary tightening, says MF Global analyst Edward Meir. Also, he points out, the Shanghai Futures Exchange “instituted its own version of ‘tightening,’” when it announced it would raise margins on a number of commodities--including copper, aluminum, steel wire rod, gold, fuel oil, zinc and steel rebar--next week. The euro is seeing little relief in the wake of an Irish loan package, Meir says. There are concerns about debt of other nations, including Portugal, Spain and Italy. The euro could break down below $1.30 against dollar, possibly by next week. If so, this could drag the commodity complex lower, Meir says.

“Obviously, this Korean story is not going to stop,” said Afshin Nabavi, head of trading at MKS Finance. “And the current European banking situation is also going to continue.” Thus, he and others said, gold should find more support.

“Come Monday, we’ll probably have a fresh start,” Nabavi said. “If the tensions continue as they are with North and South Korea, I wouldn’t be surprised if we test the higher end of the range…With the European situation, I don’t think a miracle will happen over the weekend. So the situation will remain. I don’t see any reason why gold should really come off in the near future.”

“I think silver and gold are in a really good position for more upside, not based on the dollar but on what is going on in Europe,” said Bob Haberkorn, senior market strategist with Lind-Waldock, who also looks for gold to tick upward even if the dollar does likewise.

There is the potential for another interest-rate hike in China that could pressure gold in the immediate aftermath, warned Mike Daly, gold and silver specialist with PFGBest.

“But if in fact that does not happen, my feeling is the gold market will trade sideways to higher,” he said. “With everything going on in the euro region, people are using the weaker euro to buy gold to hedge positions or to move to safer havens.”

“That region (Europe) is very fragile, and I think it’s going to move the gold higher long term,” Daly said. This especially may the case since the U.S. economic situation “isn’t fantastic either,” with high unemployment and foreclosures continuing.

 Daly also said any actual outbreak of war on the Korean Peninsula would mean safe-haven demand for gold, even if the metal at times is pressured by gains in the dollar.

Technical analysis:

In the daily chart below we can see gold Price bouncing back from Upper Bollinger band and now hovering just below Bollinger middle band which sits along with rising trend line support (now resistance). Price did breach these levels but quickly bounced off.  A successful break above these levels is needed for gold to maintain its bullish stance in short to medium term.

Most of the indicators we use are painting a rather mixed picture on daily charts. Slow Stochastics suggest

overbought conditions on daily chart and Friday price fall was in line with slow Stochastics.

RSI is in a neutral territory and have some way to go to reach over bought levels although Friday price move has turned it to the downside. RSI is also sitting just below its short-term resistance level and will have to successfully breach this level to resume its uptrend.

MACD is still hovering in bullish zone but well off its earlier levels. Price is travelling towards Zero line and with falling histograms we can see the current uptrend losing its steam.

1378-82 area is to watch for in coming days as critical resistance level, a successful break above this level will call for $1400.

Price will find support at $1348-51 levels and break below it can call for $1320-25 level.

Daily Gold and Silver Expected Range:

Gold: US$1348- $1382

Silver: US$26.15 - $27.70