Today the eurozone ministers of finance are expected to decide whether to provide Greece with another substantial loan in order to prevent it from defaulting on its debt in March 2012. There are doubts that the Greek government will manage to implement their austerity plan.
China promised to invest in the eurozone’s stabilization fund and to support its level of investments in Euro-denominated assets.
Yesterday Italy sold its bonds to the amount of 6B euro at lower yield. The Spanish bond auction was also successful. The eurozone and German economic sentiment indexes came out yesterday better than expected. The eurozone’s GDP report for Q4 2011 is expected to come out today.
The situation in the Strait of Hormuz keeps deteriorating. The USA and Israel keep blaming Iran for planning a series of terrorist acts in Thailand. Iran denies any involvement.
John Paulson, the famous billionaire and investor, has reduced its holding of SPDR Gold Trust’s stock by 15%, still remaining the biggest holder if the trust’s stock. George Soros has nearly doubled his holdings of the trusts stock.
Yesterday China started trading yuan-denominated gold ETFs in Hong Kong for the first time in history. The trading volume reached 31800 shares. One share is equivalent to 0.1 gram of gold.
Against this background, yesterday gold and silver prices stayed in a narrow range.
Forecast:
According to the Department of Commodity Trading of , 1733-1734 is the current resistance area for gold. Once the price consolidates above it, gold will get a chance to rally up to 1750. The current area of support is 1722-1724. However, the price may also test 1718.
Silver may well test the 33.92-33.95 area. In order to do that, the price will have to consolidate above 33.75. Once an H1 bar closes below 33.65, the probability of going down to 33.5 (and maybe 33.35) will increase.
