Cache Metals' Bullion and Commodity Week-In-Review forNovember29 € December 03, 2010.
GOLD
Ireland's formal application for financial aid from the EU and the international community initially gave risk appetite this past week as the EU and IMF provided 85 Billion euro to rescue Ireland over the past weekend. The market reaction to the news has been quite timid at best as currency traders continued to be worried about the possible contagion effects of the sovereign debt crisis in Portugal and Spain. The Euro touched a 3 month low of 1.2968 as the boost proved to be short lived In addition to the debt worries, geopolitical tensions increased sharply when North Korean artillery fire hit a remote South Korean island, killing several.
North and South refuse to be nice to one another. Spot gold remained upbeat thanks to increased demand for safehaven asset types, with gold reaching a 3 week high of 1398.60 per ounce. It largely traded sideways for the week reaching a weekly low of $1353.30 before dip buying present itself. The range bound metal stayed away from large rallies as the market awaits the release of the Nonfarm payrolls. The first data due up was the weekly initial jobless claims, which rose by 26,000 last week to 436,000 (last week was also revised up by 3,000, so one could see it as a 29,000 increase). This was worse than the expected level of 422,000.
The prior weeks surprise to the downside seems to have been a bit of a dream. Initial claims have been trending lower since they hit a secondary peak of 504,000 on August 14. The data on continuing claims was also very disappointing. Continuing claims for unemp loyment insurance rose by 53,000 to 4.270 million.The release of the Non farm payrolls was a massive disappointment to the down side as traders were anticipating a strong rise above 150,000 given the buoyant ADP release earlier in the week.
The NFP shows that the labor market remains seemingly challenged for most workers as a pick up in business activity has yet to transform itself into any significant demand for jobs. NFP came in at 39,000k jobs versus 143,000 eyed and the unemployment rate rose to 9.8% from 9.6% (forecast). All the reports missed their mark which all traders were eyeing to see if the recovery took hold. Spot gold rallied off of the disappointing outlook striking a 4 week high of $1406.80. Today's news could have a major impact on consumer spending during the critical Christmas shopping season as the spike in unemployment rate could send consumer sentiment plummeting. The news sent the rallying green back lower across all major currencies.
With that being said, this shows investors that gold is money and is the ultimate currency. Demand is also very strong as central banks and investors continue to buy precious metals. Gold is up on uncertainty and will remain up until the world's uncertainties and debt problems are resolved. Look for the metal to challenge the all time highs of $1424 and maybe higher before years end.
The Timeof Investing in Silver or Gold is NOW.Visit cachemetals.com and review our interactive brochures and buying guides. Contact one of our specialists at 1.416.916.6660 or 1.877.916.6670 for a no risk consultation.
SILVER
Spot silver has followed gold's assent higher striking fresh new 4 week highs of $29.32, following the disappointing labor news.< /a> After languish in lower values of $26.85 for the beginning of the week, the grey metal finally showed its penchant for outperforming its bigger brother gold. Strong supportive news out of China gave the metal a much needed boost.
Prices jumped as China approved a fund that will invest in gold exchange-traded funds outside the country, opening the door to mainland China investors who face negative real interest rates on their bank deposits and want to hedge against inflation as first reported by the Dow Jones news wire. Adding to the bullish sentiment is the statement by GFMS chairman Phillip Klapwijk, "Silver prices may peak near $35 an ounce next year and average close to $30 on strong investment demand and continuing growth in industrial consumption."
While we have seen the grey metal take a breather over the past 4 weeks with bearish news hitting the market , a robust an otherwise stronger Dow Jones has kept the metal quite buoyant. November saw the metal rally from its doldrums to close higher with increased buying on the dips. A sale of US minted eagles continues to remain robust despite the sell off we have witnessed at the start of the month. Silver coin minting globally is projected to rise a robust 23 percent this year, to an all-time record, according to data released last week by GFMS Ltd, and with the recovery somewhat in question for the poor employment figures released Friday this number could even be much larger. This has been an absolutely fantastic week for the dual-role metal as it finally broke through the $29 level, especially since this was done on a Friday when investors are normally reducing and closing books after a long week.
The question we are presented with ev eryday "is it to late to buy?" We say not at all! In a bull market as such the best approach is to always be ready and gradually buy. In moves such as these, we can always expect a pullback so have the funds in place because these pullbacks don't seem to last very long and timing is everything. Many believe Silver is set to climb further next year possibly by as much as 20% and while one the great advantages of silver is its relative cheapness compared to gold, makes it very attractive to the not so average investor.
GOLD Support $1400/$1495
SILVER Support $29.00/$28.85
GOLD Resistance $1410/$1415
SILVER Resistance $29.32/????
Weekly Close for Gold
November26 - $1362.30December03 - $1405
Weekly Close for Silver
November26 - $26.70 December03 - $29.24
Weekly Close for Platinum
November26 - $1645 December03 - $1697
Weekly Close for Palladium
November26 - $676 December03 - $762
Monthly Closes
October - Gold $1357 November - Silver $1385
October - Silver $24.56 November - Silver $28.19
October - Platinum $1705 November - Platinum $1650
October - Palladium $645 November - Palladium $701
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Trading Department - Cache Metals Inc.
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