Weekly Gold Review (2011.05.16): http://www.hx9999.com/en/comment_week_729.html
Early in last week gold and silver recovered from the previous low on dip buying and news about Greece financial crisis. Gold rebounded sharply form the previous closing of 1,495 USD on Monday, with a range between day low 1,492 USD and day high 1,513.60 USD. Strong support was seen at the level 1,500 USD according to the trend. Performance mixed at about 1,510 USD on Tuesday with range narrowed. Market seemed to be confused. On Wednesday gold rose to the highest of 1,510 USD with the support of strong silver trend that once reached 39.50 USD during the session. Gold tumbled to 1,477.80 USD in next session yet buying on dip pushed the commodity back to close at the level of 1,496 USD as previous week on Friday.
Certain unfavorable factors were seen in the market. Trend of oil reversed from its strength since Wednesday, falling from the weekly high of 104.60 USD to the lowest of 94.25 USD on Thursday. Performance of the greenback also contributed to the weaknesses of the metals. Euro continued to decline to the weekly low of 1.4065 on Friday, colsing at 1.4115. on the whole the greenback was strengthened with the ascending dollar index from 74.4 to 76.
Support of dip buying tendency during the early last week was offset by rumors of Soros’ selling. Worsestill the global largest SPDR gold ETF also reported a reduction of 13.14 tons in holding, reflecting investors’ negative bias.
Technically a triangle was seen in the trend of last week, with lower support upon medium-term supporting line, upper resisance from pressure below rallies, and horizontal range between 1,488-1,493 USD. Price could be more volitile if the tringle was breached. Investors should notice a downside break through might occur according to the momemtum in the week.
Silver was more fluctuated than gold with a 7.20 USD or a 22% difference between weekly low of 32.30 USD and weekly high of 39.50 USD, on increasing risk factors. The U.S. Futures Exchange and the regulatories might further tighten trading rules if price remained volitile, threatening performance of the commodity.
Moving ranges of gold and silver should shift to1,469-1,530 USD and 30-40 USD respectively. Pressure on the commodities would increase if dollar extended its strength.
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