ពត៌មាននិងការព្យាករណ៏តំលៃមាស​​ ប្រចាំ​ថ្ងៃ

Gold Nose Dived as Profit Takers Stepped In

08 Dec 2010	1st resistance	2nd resistance	3rd resistance
Today’s resistance US$	1423	1444	1458
	1st support	2nd support	3rd support
Today’s support US$	1388	1375	1354
Today’s pivot point US$	1410

The Day’s Story:

Gold nose dived on Tuesday during U.S hours of the session after rising to never seen before highs for second straight session. Gold prices met with profit taking after strong gains in recent days and traders decided to lock some of the profit made on their positions. Also came into play was speculation that China may raise its key interest rate to curb rising inflation in world second biggest economy. An effort to cap inflation means slow economic growth and less demand for commodities especially gold which enjoys the status of being a hedge against inflation. Stronger U.S dollar also contributed to gold’s losses. Gold has appreciated 28% this year and poised for its 10th annual gain. Gold has outperformed stocks, currencies and most commodities in this amazing run.

U.S indexes ended mixed after giving away their earlier gains as optimism over the extension of Bush-era tax cuts was faded due to widening investigation into insider trading by FBI. The Dow Jones closed down 3 points at 11359 while S&P 500 finished unchanged at 1224 after rising to its 2 year high earlier during the session and NASDAQ rose 3 points to finish its day at 2598. Stocks fluctuated around breakeven point during the session due to the absence of any significant economic event. Traders did react positively to extension of Bush-era tax cuts initially but spent most of the day mulling over weekend comments made by Fed’s Chairman over the health of U.S economy. Meanwhile European debt saga still remains at the backdrop as EU finance ministers meeting ended without any outcome. Stocks in Europe however, had an up day with Britain's FTSE 100 rising 0.66%, the DAX in Germany rose 0.68% while France's CAC 40 rose the most by 1.63% to finish the day.

Meanwhile, markets continue to speculate on China’s key interest rate hike which contributed to gold’s demise on Tuesday.  China imported 209.7 metric tons in the first 10 months of 2010, which equals to 7.4 million ounces of precious metal. For comparison, that figure exceeds the activity of the gold ETF, SPDR Gold Shares, the world’s biggest gold exchange trading fund, which added 164.36 tons, or 5.8 million ounces, in the same time period. China has already hiked its rate in October and raised Reserve Requirement ratio for its banks twice in November in order to curb rising inflation. Analysts are expecting China to raise its interest rate early

next year but if China decided to surprise the market before the end of this year that will be a bearish sign for precious metal and will trigger some profit taking and panic selling.

This week’s economic calendar is fairly light, with the trade balance and consumer confidence out on Friday. Consumer confidence could be given more credence, in a way to compare some of the early views toward holiday spending. European debt problems which were offset by some important economic releases last week may come to forefront once again. Bullion will remain well supported due to ongoing European debt saga and fresh talks about possible FED’s move will provide enough reasons for investors to buy gold. Although China’s move to stabilize inflationary pressure is bearish for gold as it reduces its appeal as a hedge against inflation but analysts believe any such move will not hurt gold prices to a great extent in medium term and there will be always be buyers at the other end of a dip in prices.

U.S. dollar index rose for second day in a row after falling deep into red zone earlier during the session. Euro gave away its earlier gains as talks between Euro zone finance ministers failed to deliver any substantial policy decisions. Euro zone’s largest economy Germany, and some other euro zone states resisted calls on Monday from the International Monetary Fund to do more to quell the ongoing debt crisis. Dollar came under extreme pressure after Friday’s report as talks of QE3 started circling around as a possible move by FED to improve job situation which has been the biggest hurdle on the way to sustain recovery. Pressure on greenback however, was relieved as European debt crisis remain an ongoing concern for European currencies despite European bond yields falling back to relatively safer levels after ECB’s announcement of Bond buying program. Gold and dollar’s inverse correlation turned positive on Tuesday as stronger dollar fueled bullion’s losses. Any relief in euro crisis, similar to what were seen during later part of last week, will push the euro higher and the dollar lower and be good for gold, as the two move inversely to each other. If a debt crisis flares up again and default is floated as an option for some countries, the euro could plummet in value and take gold with it. Safe haven buying, however, should create a floor of support for gold prices.

Gold prices could be more volatile towards the end of the year (similar to what we have been seeing in late yesterday and early today’s session) as profit-takers contend with "bargain-hunters" and those wanting to add gold to their portfolio before the New Year. During December, those traders selling gold future contracts must also deliver physical gold and the longs must pony up the cash which increases liquidity and volatility in the market. However, the end of the year traditionally brings with it less liquidity and greater potential for rapid shifts in price direction, meaning that gold could endure more setbacks before resuming its uptrend.

Recent Price Recap:

Gold price was boosted by Federal Reserve’s $600 Billion QE2 package in early November and crossed above $1400 on November 8th as a reaction to that move. Price peaked to $1424 but entered a correction phase as some profit taking and book squaring sent prices to early 1300 levels. After a shallow correction, gold found support at the back of European debt contagion fears. Further support came as tensions between North and South Korea escalated after North attacked a South Korean Island killing four marines. Gold cut most of its

losses last week but remain subdued due to concerns that China may raise its interest rate to curb rising inflation. Stronger US dollar also put a lid on gold’s gains but Friday’s jobs numbers proved to be catalyst bullion had been looking for as investors seek refuge in the safety of precious metal and dumped U.S dollar. Further strength was found at the back of Fed Chairman’s comments which sent prices to their all time high level for two days in a row in last two sessions. Gold recent gains met with some profit taking and book closing by funds dragging price below $1400 levels at the time of writing this report.

Yesterday’s Price Action:

Gold price started its first session in a quiet mode and price traded in a narrow range throughout the session. Price started to break its range during early European session and extended its previous day’s gains, rising to its intraday high of $1431 an ounce soon after mid European session. Gold price came under pressure at that point and started to make its way down just before U.S market open. Gold came under extreme selling pressure during U.S session and fell below $1400 to its intraday low of $1396.4 an ounce before reclaiming $1400 territory just before the market close. Bullion managed to close just above critical $1400 level at $1401.8 an ounce.

Other Metals:

Silver futures for March delivery closed up 4 cent to $29.78 an ounce on Tuesday.

Platinum futures for January delivery fell $8.40 to $1,705.20 an ounce on NYMEX.

Palladium futures for March delivery fell $12.70 to $738.70 an ounce.

N.Y. Copper for March delivery closed up 4 cents to $4.05 a pound on Tuesday.

Gold (News and Views):

      February Comex gold closed down $7.10 at $1,409.00 an ounce on Tuesday.

      The London P.M. gold fixing was $1,420.00 on Tuesday compared to its previous P.M fixing $1,415.25.

      The world’s largest gold exchange-traded fund, New York’s SPDR Gold Trust, said its holdings fell to 1297.726 tons on December 07 down from 1298.030.

      The dollar index, which measures the U.S. currency against a basket of six major currencies, rose by 0.31 to 79.94 on Tuesday.

      Crude Oil for January delivery fell $0.69 to $88.69 on Tuesday 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.

      Gold volume on the COMEX division of the New York Mercantile Exchange was at 170,000 contracts, 30 per cent below its 30-day average, as some trading desks and funds already have closed their books ahead of the year end.

      The Thomson Reuters/Jefferies CRB Index of 19 raw materials fell for the first time in a week after reaching the highest in almost 26 months. Assets of gold in exchange-traded products rose 0.75 metric ton to 2,099.15 tons yesterday, according to data compiled by Bloomberg from 10 providers.

      The number of ounces of silver needed to buy one ounce of gold hit its lowest level since February 2007 at

just 46.99, having declined from a seven-month high this February at 70.91.

Factors Affecting Gold Price Yesterday:

“The market had really run out of momentum, and, although we made new highs, it was more on sentiment than on fresh business,” said Simon Weeks, head of precious metals at the Bank of Nova Scotia.

Metals markets are seeing new money entering as they set record high prices for nearby contracts, along with record high volume and open interest. That creates “the perfect formula for momentum traders and funds,” says George Gero Vice president with RBC Capital Markets Global Futures, Vice President-precious metals strategist. “We now see new funds entering the markets for asset allocation to metals, namely retirement and endowment funds which actually carry more money and more holders than ever-clients at funds demanding funds managers to be in gold and the rush to show participation is evident,” he says.

At this high, the market was vulnerable to profit-taking,” said Jim Steel, an analyst with HSBC in New York.

The Irish parliament is voting Tuesday on its budget of spending cuts, which is one of the bigger political events the precious metals market participants are watching. Ireland received a bailout of its banks recently in partial exchange for spending cuts. Commerzbank says a rejection of the budget could cause more turmoil in the eurozone. “Against this backdrop, gold should remain in demand,” they say.

Also lending support to all markets is news that President Obama and the Republicans have reached a compromise on tax policy, says Ed Meir of MF Global. “It remains to be seen whether these cuts will have the desired impact of stimulating the economy, but they most certainly will grow the deficit and weaken the dollar, and this is perhaps what is behind the sizable advance we are seeing today,” he says.

 
“Tactical investors have turned positive on gold and silver and increased their long exposure. In our view, positioning does not look excessive, suggesting that the sector could attract further near-term flows,” Credit Suisse analysts said in a note. “However, with markets closing in on critical price levels, risks of investors’ taking profits have increased as well.”

“You have some very willing sellers,” said Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago. “We are coming to the end of the year, and with gold making another high, it’s a good time to take profit.”

Gold Future Outlook:

"Every time we've seen a decline in prices, we've seen investors step in and use that as a buying opportunity," argues Rohit Savant, senior commodity analyst at CPM Group.

"We can see prices dip to maybe $1,380-$1,360 on the downside and on the upside we will probably see prices rise maybe even towards $1,450," Savant said.

Some analysts said that dwindling volume for precious metals futures could signal price declines in the near term, or at least the metals might already have reached short-term tops as trading interest faded.

“We have no real growth and no interest-rate hikes coming along,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. “The longer-term view is that governments will continue to provide liquidity to the markets and debase their currencies. This sets up gold for much higher prices.”

Technical Analysis (By Jim Wyckoff):

Technically, February Comex gold futures on Tuesday closed nearer the session low and scored a bearish "outside day" down on the daily bar chart, whereby the high was higher and low was lower than the previous day's trading range, with a lower close. If there is strong follow-through selling pressure in gold on Wednesday, then a more significantly bearish "key reversal" down would be confirmed on the daily bar chart, which would be one early clue that a near-term market top is in place. But right now, Tuesday's price action is just mild profit-taking pressure in a strong bull market.

A four-month-old uptrend is in place on the daily bar chart.

Bulls' next near-term upside technical objective is to produce a close above strong technical resistance at the all-time high of $1,432.50.

Bears' next near-term downside price objective is closing prices below solid technical support at $1,383.00. First resistance is seen at $1,420.00 and then at Monday's high of $1,429.40.

Support is seen at Tuesday's low of $1,403.00 and then at $1,400.00.

Wyckoff's Market Rating: 8.0.

Daily Gold and Silver Expected Range:

Gold: US$1380- $1414

Silver: US$28.0535 - $29.42