Financial Daily from THE HINDU group of publications
Thursday, Oct 23, 2003
Financial Daily from THE HINDU group of publications Thursday, Oct 23, 2003 |
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Agri-Biz & Commodities
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Precious Metals Columns - Global Monitor Gold consolidating in $370 range G. Chandrashekhar
Mumbai , Oct. 22 GOLD continues to consolidate around $370 an ounce, with little appetite from traders to break either support or resistance levels. The market continues to watch the currency markets closely for direction, but generally positive US corporate earnings and economic data are supporting the dollar against the apparent consensus expectation of further weakness. Downward pressure on gold has eased in line with an easing in the total net long speculative position in gold. The latest Comex report shows that long liquidation from large speculators had resulted in a fall in the net long position by 44.9 tonnes to 251.2 tonnes. "Upside is more likely should upcoming US data disappoint the markets but vice versa is also true in the short-run," commented Mr Kamal Naqvi, analyst with Macquarie Research Equities. Gold ended last week at $370.50/oz (London PM fix), versus $372.30/oz previous week close. On the other hand, silver prices held around $4.90/oz although a softening bias continues in a market that continues to struggle to inspire any sustained interest. There is a tendency among economists and market strategists to take a view on the dollar and immediately and directly transfer it across to gold. There is no doubt that gold price trends tend to be inversely correlated with the dollar; but it is not surprising because the dollar is the main currency for trading the metal and gold still remains an asset somewhere between being a currency and a commodity. Commenting on the widely held belief that the only variable that matters in analysing gold is the dollar movement, Mr Naqvi said the relationships had varied significantly over time and it would be an over-simplification to assume that the dollar is the only variable when analysing gold.
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