Platinum, palladium prices set for big gains
2009-10-15 10:05:00
LONDON (Commodity Online): Precious metals rallied this morning mainly on the back of the much weaker dollar. The dollar is much weaker; commodity prices are much higher. It remains “a dollar game”. We still expect a dollar against the euro at $1.58-$1.60 in Q1:2010.Risk appetite is decent today. The VIX index declined late yesterday afternoon, US Treasuries are losing ground, and Asian and European equities are trading higher.
The futures market is signalling upside for US equities today. EM currencies are also stronger against the dollar. On top of this, China has reported surprisingly bullish copper import figures, which could encourage bullish sentiment on strong commodity demand from China and Asia.
In the US, we would be looking at Advanced Retail Sales for September. Following the recent trend, if the figure comes in above 0.2% m/m, the dollar could see more weakness as risk appetite improves. The odds might favor exactly this. With the positive Q3 earnings by Intel yesterday, there could be some indications that retail sales in the US are still growing.
We expect gold to find some resistance at the current price levels. However, we also still favour buying gold on dips. We see support for gold at $1,054 and $1,044, with resistance at $1,070 and $1,078.
While platinum and palladium are giving up some gains after weaker than expected Eurozone industrial production, support remains in place for a move higher. Key will be tomorrow’s Eurozone new car registrations for September. Looking at recent consumer spending data from the Eurozone (which has been mostly in line or above expectations), car registrations might also surprise on the upside.
Silver is trading just below $18.00. Given the good copper import figure from China, silver could also find additional support. We see resistance at $18.00 and $18.30, and support at $17.50 and $17.30.
Courtesy: Commodities Research, Standard Bank
