Commodity Online
Gold is sharply lower this morning, pressured by a stronger dollar on news that Standard and Poor’s has downgraded Ireland’s sovereign credit rating to AA. The pressure in euro currency in response to the is downgrade will make it difficult for the gold market to maintain what is considered a high value above 950.00.
There is no signs of a bounce this morning based on flight-to- quality buying, the dollar is much too strong for a gold rally to materialize in the early going. The physical side of the gold market remains a good story and it is just a matter of being patient with the current sell off in the gold, as stated late last weekend, the first major support level for August gold is 942.00- 927.00.
Silver traders must also wait for a test of major support at 14.65 -14.35. It is very important that traders seek optimal entry in this volatile market environment, another approach is to accumulate calls into these major support levels.
The price forecast for gold this summer is still $1,139.00, trade accordingly.
LME Copper stocks were down 2,125 tonnes, totaling 297,850. This trend has not slowed and expectations for a rise in Chinese demand in 2009 will support the copper market on any general liquidation that occurs on dollar strength. Users can look to price copper based on front month at 212.00- 208.00. The longer term objective for front month copper is 271.00.
