ODJ NY Precious Metals Review: Gold Bolts $3.80 Higher Late
-- Dealer Short Covering, Higher Oil Prices Main Drivers
-- Mar Silver Dragged Higher By Gold, Back Above $4.70
-- Platinum Sturdy Above $605, Seen Higher
>>"This is a secular bull market that has been in place for nearly two years, so it shouldn't be surprising when a bull market makes new highs - that's what bull markets do," he said.
"We could easily hit $360 within the first quarter of 2003," Kaplan said. "Yes, there's going to be some profit taking coming through now, but we are going to continue higher regardless over the longer run."<<
By Gavin Maguire
New York, Dec. 16 (OsterDowJones) - Comex Feb gold futures bolted $3.80, or 1.1%, higher in the last five minutes of trading Monday on a frantic short- covering rally by traders who had been sellers of gold throughout the day.
The sharp jump in crude oil prices to 11-week highs of around $30 per barrel was another major catalyst for the late strength. However, the resting stop-loss buy orders that were tripped as soon as prices scurried above Friday's high of $336.30 to spark the widespread short covering were the main buoyancy factor, sources agreed.
They said the fact that gold has now reached its highest levels since October 1999 is likely to draw in additional speculative buying interest, particularly if oil prices remain choppy and the U.S. dollar stays weak versus other currencies.
However, some profit taking is expected by speculators who have been building long positions over recent weeks and are now looking to secure profits ahead of the year-end.
That said, Leonard Kaplan of Prospector Asset Management, said that it should be "no great surprise that gold has made more gains.
"This is a secular bull market that has been in place for nearly two years, so it shouldn't be surprising when a bull market makes new highs - that's what bull markets do," he said.
"We could easily hit $360 within the first quarter of 2003," Kaplan said. "Yes, there's going to be some profit taking coming through now, but we are going to continue higher regardless over the longer run."
In the meantime, he and others allowed for a potential pullback in prices from the recent highs, but expected good buying to emerge in the $325 level.
"I for one am going to be a good buyer from around $325, and I think others will be as well - and the $315-$320 area might well contain any selling pressure from here on out," Kaplan said.
"I think we could be entering a new, higher trading range above the recent $315-$330 range. The problem is, I don't know where the top of this new range will be. It could well be $320/$325-$340. We'll just have to wait and see."
In the meantime, Feb gold's resistance is touted at $340 initially and then around $345 and $350.
Spot gold also shot higher late on and ended the session at $336.58, while on a continuation chart prices ended the day at $337 - just $2 per ounce off the October 1999 high.
As on the futures market, spot metal is expected to encounter some profit taking over the coming days, but further gains are again expected over the longer run.
Mar silver futures settled slightly lower on the day but were tugged sharply higher late in the session by gold's rise. Silver futures are expected to continue following gold over the coming days.
Support is seen at the 10-day moving average around $4.65. Resistance is seen at $4.75 and then $4.775 and $4.80.
Nymex Jan platinum settled $3.40 higher at $605.10 and fresh contract highs. Further gains are expected on the back of continued fund interest drawn by decent levels of demand and struggling supply chains.
Upside targets include $610 initially and then $620 and $630, although dealers were quick to point out how thin conditions remained through the session. They suggested that even a light bout of profit taking would swiftly dunk Jan back below the $600 mark.
Mar palladium, meanwhile, probed fresh contract lows of $234 early before drifting sideways on an absence of interest in the $238-240 region ahead of the $239.50 settlement.
Further erosion lower is expected over the coming weeks because of poor demand and steady supplies.
futuresource.com |
