Update on supports and resistances. ( 29/02/2012 09:57 )
Pivot: 1530.
Our preference: bullish above 1530 with 1800 & 1913 in sight.
Alternative scenario: A downside breakout of 1530 would open the way towards 1415.
Comment: the rising 50D simple moving average is turning up.
Trend: ST Bullish; MT Bullish, we have been bullish since 17 FEB 2010 (1114).
Key levels Comment
2000 Round number
1913 Swing high
1800 Horizontal resistance
1754
1530 Pivot point
1415 Horizontal support
1315 Horizontal support
TIPS:
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NEWS:
Gold futures held steady on Wednesday, pausing after the previous day’s sharp gain, as investors waited for a second liquidity injection from the European Central Bank later in the day before opening fresh positions.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,788.05 a troy ounce during early European morning trade, easing up 0.1%.
It earlier rose by as much as 0.27% to trade at USD1,791.95 a troy ounce, the highest since November 14.
Futures were likely to find support at USD1,767.25 a troy ounce, Tuesday’s low and resistance at USD1,796.45, the high from November 14.
Investors looked ahead to the launch of the ECB’s second three-year long-term refinancing operation, after a similar liquidity injection in December eased pressure on peripheral euro zone bond markets.
Market participants expect the liquidity operation to total nearly EUR500 billion, after banks borrowed EUR489 in the December operation.
Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies and boost inflation.
Gold prices have rallied nearly 14% since the beginning of 2012, boosted by growing expectations for further monetary easing measures from global central banks.
French-based financial service provider Societe Generale said in a report last week that it expected gold prices to “challenge” USD2,200 an ounce by the end of 2012.
“Global liquidity, negative real interest rates and persistent fears over fiat currencies as a whole will boost investment at all levels,” the bank said. “Even when the sovereign debt issues have been resolved in Europe, inflation will by then be an important issue.”
Further improving sentiment on the precious metal, Iran’s state-run news agency IRNA said Tuesday that the Persian Gulf country will take payment for oil from its trading partners in gold instead of dollars, in response to the financial embargoes imposed on the country.
Elsewhere on the Comex, silver for May delivery eased down 0.25% to trade at USD37.11 a troy ounce, while copper for May delivery gained 0.55% to trade at USD3.943 a pound.
Silver prices surged nearly 4% on Tuesday to hit the highest level since mid-September, after breaking through a key resistance level close to USD35.73 a troy ounce.
Market participants said that the breach above that level signaled an upward momentum in prices and triggered fresh buy orders from large institutional investors and hedge funds.
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