Alex von Stachelkopf
Today is the first day of another EU summit. It is expected that EU leaders will finally sign an agreement to create a permanent stability fund and to establish tougher fiscal control within the union. In the meantime, Greece continues the talks with its lenders. Italy is holding a bond auction.
Last week major gold investors reduced short positions and expanded long ones (-88 and +6106 contracts correspondingly). Minor investors increased both long and short trades (+1274 and +676 contracts correspondingly). As for silver, the situation is different: major speculators increased their long trades by 842 contracts and simultaneously reduced their short trades by 1882 contracts. Minor speculators: +969 and -946 contracts correspondingly. The outflow of capital from commodity funds reached $345M.
Friday’s US GDP report came out worse than expected. Some investors say this may be the result of the Fed Reserve’s policy of low interest rates.
The Chinese Premier said the People’s Bank of China will be cautious about its QR policy in order to avoid new bubbles and higher inflation. China’s housing market depreciated by 23.6% in 2011. This month the country’s production volume has declined for the 2nd time in 3 months. China is planning to create a global financial center for yuan-based trading in 2015.
In the meantime, the International Atomic Energy Agency delegation came to Iran in order to inspect the country’s nuclear facilities.
Against this background, gold and silver have recently updated this year’s highs. Investors will be monitoring China’s demand for gold after the holidays.
According to the Department of Commodity Trading of , today gold may retrace down to 1725, and maybe 1700, especially if an H1 bar closes below 1735. The rally is expected to resume after the retracement. The targets are 1750, 1761, 1775.
The demand for silver started declining at the end of last week. The price may retrace down to 33.10, 33.0 . If an H1 bar closes above 33.80, it will trigger the bullish scenario. The targets are 34.50, 34.70.
Alex von Stachelkopf
