Oil N' Gold - Resources for Serious Traders
Energy and Precious Metals Technical Analysis
Commodity Report: Gold Print E-mail
Analysis | Commodity Technical Analysis | Written by Compass Global Markets | Thu Mar 29 12 22:55 ET

Standard and Poor's head of sovereign ratings put a spanner in the works of recent euro-optimism by saying that that Greece may yet again have to restructure its debt. He said that 'down the road, I'm not predicting today when, another restructuring of outstanding debt.' is likely. The news dampened an otherwise good employment data release in Germany which showed unemployment falling more that forecast in March. The unemployed fell by 18,000 to 2.84 million in a hopeful signs that growth in Europe's biggest economy is picking up. In other news out of Europe, it appears that European policymakers are preparing to announce a one year increase in the size of the European rescue fund to EUR 940 billion at today's finance minister's summit in Copenhagen. The EUR has opened the morning marginally weaker at 1.3300.

German Chancellor Merkel has warned the world of 'fragility' in Portugal and Spain as she continues to campaign for more internation-al funds to be pledged to the International Monetary Fund to fight the European debt crisis. It is expected that ministers will seek to make amendments to rules implemented last year which limit the bailout fund to EUR 500 billion. Meanwhile, in the US, unemployment claims fell to their lowest level since April 2008 and figures were released which showed that economy grew at a 3% annualised rate in the December quarter. The Australian dollar came under further selling pressure overnight trading as low as 1.0304 before recovering to open the morning at 1.0390 and unchanged from yesterday morning.

US equity markets fell for the third consecutive day on the S&P comments about Greece. Financial stocks were the hardest hit with Bank of America and Citigroup falling more than 2% as 9 out of the 10 industry groups in the S&P 500 lost ground. A late recovery in shares has seen the S&P 500 lose only 0.16% to 1,403. Earlier in Europe, share markets continued their downward spiral with the DAX falling 1.8% and the FTSE lower by 1.15%. Asian stocks were led lower by falling markets around the world.

Commodity prices slumped overnight with the CRB index losing 5.53 points to $305.94. WTI crude fell to its lowest levels in 6 weeks, losing 2.5% to $102.80, after France made comments about international cooperation to release supplies from strategic stockpiles. There was a general lack of interest in precious metals with gold flat at $1,660 while silver gained 0.8% to $32.10. Soft commodities suffered heavy falls with coffee, cocoa and wheat all falling about 3%. Copper bucked the trend gaining 0.33%.

GOLD dipped to a four-day low of $1645 during the US morning session extending the two-day losing streak before sharply rebounding to open this Asian morning at around 1661, unchanged from the previous opening. A less than expected fall of jobless claim in the US combined with market vigilance towards Spain's fiscal sustainability as both Spanish debt and Italian bond yields are rising have contributed to pessimism which saw the precious metal testing below 1650 earlier. A slumping crude price through important supports also encouraged selling of gold, before it recovered nearly all the losses as the US equity market recovered led by blue chips. We still remain neutral on gold, as it is currently following the equity and commodity markets closely. Aggressive traders could long equity/gold expecting the close correlation to break as gold has not been outperforming shares for months now.

Compass Direction

  • Short-Term: NEUTRAL
  • Medium-Term: NEUTRAL

Compass Global Markets Pty Ltd

FX research by Keagan York
Commodities research by Peter Turville-Ince

DISCLOSURE AND DISCLAIMER

Compass Global Markets, ACN 144 657 885, Authorised Representative No. 377377, is a Corporate Authorised Representative of Calibre Investments Pty Ltd (Australian Financial Services License No. 337927). Please refer to the Financial Services Guide which is available through our website www.compassmarkets.com for more information regarding the financial services that we offer.

All references to prices, amounts and currency are in Australian dollars unless otherwise noted.

This report is provided for Australian residents only and is not intended for use by residents of any other country.

GENERAL ADVICE WARNING: The advice provided in this report has been prepared without taking into account your particular objectives, financial situation or needs. You should, before acting on the advice, consider the appropriateness of the advice having regard to these matters and, if appropriate, seek independent financial, legal and taxation advice before making any financial investment decision.

This report has been prepared for the general use of Compass Global Markets clients and must not be copied, either in whole or in part, or distributed to any other person. This report and its contents are not intended to be construed as a solicitation to buy or sell any security, product or asset, or to engage in or refrain from en-gaging in any transaction.

Compass Global Markets does not guarantee the performance of any investment discussed or recommended in this report. This report and the information used within may include estimates and projections which constitute a forward looking statement that express an expectation or belief as to future events, results or returns. No guarantee of future events, results or returns is given or implied by Compass Global Markets. Such statements are made in good faith and based on reasonable assumptions at the time of publication. However, such statements are also subject to risks, uncertainties and other factors which could cause actual results to differ substantially from the estimates and projections contained in this report or otherwise provided by Compass Global Markets.

Any information referencing past performance is not indicative of future performance. All information in this report has been obtained from sources believed to be accu-rate. Compass Global Markets does not give any representation or warranty as to reliability, accuracy or completeness of information contained in this report and therefore all responsibility is expressly disclaimed, whether due to negligence or otherwise. The information presented and opinions expressed in this report are given as of the date hereof and are subject to change without notice. We hereby disclaim any obligation to inform you of any changes after the date hereof in any matter set forth in this report.

Global Compass Markets, its affiliate and their employees may hold positions in the financial products, or securities or derivatives of, in the companies referred to in this report from time to time.

Analyst Certification: The views or opinions expressed in this report accurately reflect the personal views of the analyst(s) and no part of the remuneration of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this report. Any views or opinions expressed are the author's own and may not reflect the views or opinions of Compass Global Markets unless specified otherwise.

 

Latest Analysis from this Author