London, 08 March 2010 - Palladium was the star performer of the precious complex last week, closing up just over 10% as strong fund buying propelled the metal through January’s high and on to its best in almost 2-years. A better-than-forecast payrolls reading also boosted stocks and commodities, giving rise to speculation the US economy will add jobs this month for the first time in over 2-years. The CRB Index gained 0.8% and crude oil 1.6% while the Dow rose 1.1% and the S&P500 1.5%. Risk appetite led the Euro to close sharply higher against the Yen, up almost 1.5%. The Euro posted a more modest 0.3% gain verses the greenback with the DXY settling down 0.15%.
Risk appetite remains steady overnight following a better-than-expected economic data from Japan and French President Sarkozy’s support for Greece. Currently the Nikkei is trading up 2% and the broader MSCI Asia Pacific Index 2.1% after the Economy Watchers Sentiment increased to 42.1 from 38.8. The Euro is also in positive territory, trading up 0.5% against the dollar and 0.65% versus the Yen ahead of economic data showing EU Sentix Investor Confidence and German Industrial Production. Commodities have opened positively as a result of the boost to risk sentiment; crude oil is currently up 0.5%, copper and platinum 0.7%.
Gold was initially confined to a narrow range between $1130-36 Friday ahead of the US NF-payrolls reading. The metal dipped initially to $1127.70 in reaction to the data however the metal soon reversed course amidst speculation of a positive reading this month, hitting a high of $1140.80 before easing back to settle at $1133.
Gold also set new all-time highs in Euro and Swiss Franc terms. Silver rallied to a 6-week high of $17.51 as gold reached its highs, closing up 0.8% and pressuring the AU/AG ratio as a result.
Both metals are trading up this morning on the back of positive risk appetite, up 0.1% and 0.6% respectively with the AU/AG ratio dipping briefly below 65:1 at one point. Further scaled-up chart resistance is expected at $1146/1158/1162 in gold and towards $18.10 in silver however we expect both to benefit from further investor diversification in the coming sessions with dips continuing to be seen as bargain hunting opportunities.
CoT data Friday showed speculators added fresh longs and covered shorts in the week to March 2nd. The net long in gold increased 1.7Mozs to 26.88Mozs, the long in silver increased 7.8Mozs to 208.43Mozs.
Platinum closed just $2 firmer Friday however sister metal palladium rallied to its best in almost 2-years as a combination of fund and ETF buying pushed the metal through January’s high of $474.
A mixed start has been seen overnight with platinum playing catch-up while palladium has run into profit taking however improving industrial and investment demand seems set to push both metals higher with platinum to target January’s high of $1655 once resistance at $1593 is cleared while palladium could now look to target the $500 level.
CoT data Friday showed a 56.2Kozs increase in the net speculative long as fund players added fresh long and covered shorts. The net long in palladium dropped 66.3Kozs to 1.458Mozs however as speculators cut over 150Kozs of longs.
