Market Reviews of the Pervious Day:
During NY session on 1 April, performances of the major currencies diversed with mixing effects of impressive U.S. economic data and expected interest hikes in Euro Zone. The greenback was shocked by the comment of William C. Dudley, president of the Federal Reserve Bank of New York, that QE2 should continue though employment was improved.
Gold closed slightly lower on 1 Apr, pressed by impressive U.S. employment data, official comments of possibly interest hikes as well as strengthening greenback. Base rate adjusted upward implied higher investment cost hence suppressed demand for the commodity. The greenback recovered in the session also brought into downside pressure. Gold previously closing at the historical high induced certain profit-taking activities as well.
Key Economic Data and Events:
GMT+8 16:30 U.K. Construction Purchasing Manager’s Index (Mar)
GMT+8 17:00 Euro Zone Producer Price Index (Feb)
Gold:
Gold opened at 1428.66 USD on 1 Apr, with intra-day Low at 1414.41 USD and intra-day High at 1436.01 USD, eventually closing at 1431.59 USD. Intra-day range of 21.60 USD was seen.
Gold retreated from high on Friday, closing slightly lower as buying on dip existed at supporting level on the upside trendline since 28 Jan. Oscillation patterns were solid.
Holding of the New York SPDR Gold Trust, the largest gold ETF in the world, reduced in largest extent since established in first quarter of 2011. Selling-off was driven by interest hike expectation and rising prices of other major commodities.
Interest hikes were more likely among worldwide central banks. Implied increasing cost of holding gold depress demand in market. Several commitee members of the U.S. Federal Reserve had commented that further QE policy would not help economic recovery. And also President of the European Central Bank Jean-Claude Trichet memtioned inflation woes on soaring food and energy prices.
Gold is still on the track of long term uptrend but short term correction still remains according to the daily chart. Improvement in technical indicators was not significant and divergence of MACD extended, indicating correction should continue.
Trading suggestions:
Investors should keep to be alert in times of oscillation and continue range trade strategy. The daily range should be within 1440-1410 USD.
Silver: continued recent trend
Silver opened at 37.65 USD on 1 Apr, with intra-day Low at 37.11 USD and intra-
day High at 37.85 USD, eventually closing at 37.81 USD. Intra-day range of 0.74 USD was seen.
Silver continued correction pattern to head down then reverse, closing with a long lower shadow short bullish candlestick. No change in trend was seen during the session.
The moving average parallels the daily chart, yet technical indicators diversed with the upside trend. Divergence of MACD extended.
Correction was expected to continue. The current moving range should be within 36.40-38.14 USD.
Next support should be distributed at about the upside trendline of 36 USD since 28 Jan.
Trading suggestions:
Trading range remains to be within 36.40-38.14 USD. Investors should continued sideway trading strategy.
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