Volumes are destined to be low, and market movements erratic, while US markets are closed for Thanksgiving today. And we foresee more of the same tomorrow. We are neutral on precious metals. However, any large downward correction, and we would buy dips.
Debt markets are still digesting the news that Dubai World has requested “a debt freeze”. While it may raise the risk appetite, it is unlikely to have a major affect on precious metals. Potential for bad debt is everywhere though, and we do expect more write-downs.
However, banks are better capitalized, liquidity has been raised to unprecedented levels, and interest rates are
much lower. As a result, commodities are better supported. Rising debt, rising liquidity and low rates continue to favour
especially gold.
While gold has pushed much higher in early morning trade, touching $1,195 at one stage, large-scale selling crept in on the back of the Dubai World news. But gold is still well supported. We see gold resistance at $1,195 and $1,200, and support at $1,170.
Platinum is testing $1,150 (after trading as high as $1,483 this morning). However, we view the move lower, which was on the back of platinum being sold by China, amid illiquid market conditions, as temporary. Platinum support is at $1,150 and resistance at $1,485.
Silver is substantially lower. We expect more volatility. Should silver break substantially lower, we would view it as a buying opportunity. Silver support is at $18.30 and $18.20, resistance at $18.70 and $19.00.
Watch out for Eurozone data releases (consumer confidence, economic confidence and industrial confidence) tomorrow morning. As trading volumes are low, data might exacerbate metals’ price moves.
