Optimistic comments by EU leaders raised metal quotes

26.11.2012 14:30
Optimistic comments by EU leaders raised metal quotes

YEREVAN, November 26. /ARKA/. Last week the gold quotes rose to a new six-week maximum of 1,754.28 USD per troy ounce amid the hike of stock indices and some other commodities assets, as well as up in investment sentiments as the U.S. “budget breakdown” became unlikely to happen.

The White House and the Congress members expressed confidence over budget issues regulation targeted at obviating the automatic rise in taxes and expenditures cuts.

USD drop amid the optimism around tax and budget issues of the U.S. has also fostered hike in the gold quotes. Meanwhile, Moody’s downgraded credit rating of France, and Ben Bernanke assessed the U.S. economy more pessimistically curbing the mid-week active deals of the investors.

Gold prices climbed significantly at the end of the week despite the failure of the EU leaders to reach agreement. The gold prices have also risen due to the comments of the EU member states, which stated the budget talks were constructive, and the second round of talks early next year is expected to be productive as well. Germany’s business environment index by IFO has also supported gold quotes rising. As a result, the gold cost advanced 2.33% to 1,751.51 USD per troy ounce last week.

We believe early this week the gold quotes are likely to consolidate as the investors are still restricting themselves from the large deals amid the lack of the definite trading reference points.
The market dealers will be looking forward to the results of the next meeting of the eurozone finance ministers. The results are to be unveiled on Monday, November 26.

If the ministers agree on the next aid tranche to Greece, the gold quotes may slightly rise. The resistance benchmark for the gold this week will be 1,778.0 USD per troy ounce. The quotes of the precious metals, including the gold, may tumble if the decision on the aid tranche to Greece is postponed again.

Gold dynamics may also depend on the macroeconomic statistics from the U.S. and the eurozone. Of the American news we should focus on the reviewed 3 Q GDP of the U.S, and the data of the housing sector, orders for durable goods and Chicago PMI business activity index in November.

Of the European news we should highlight consumer confidence index of the eurozone in November, and data on Germany’s labor market in November. The expected moderately positive data from overseas, and weak macroeconomic statistics from the eurozone may pressure the gold quotes. The supporting benchmark from the gold this week will be 1,726.0 USD per troy ounce.

Copper price last week rose 1.44% to 3.5250 USD per pound. The highest jump the copper quotes demonstrated on Monday and Friday amid improvement of the investors’ sentiments due to the U.S. budget and tax policy normalization and positive comments by the European politicians around the EU budget.

The decreased reserve of this asset at London Metal Exchange also fostered hike in copper quotes.

This week copper dynamics will mainly depend on the macroeconomic statistics of the United States and USD positions. The statistics is expected to be moderately optimistic. If the forecasts come true, and the data on the U.S. GDP and housing market are moderately positive, the non-ferrous metals, including the copper, may continue climbing.

If the EU finance ministers agree on the aid tranche to Greece, the copper quotes may also rise. The resisting benchmark will be 3.54 USD per pound. Copper prices may also rise to 3.63 USD per pound this week.

The supporting level for the copper will likely be 3.47 USD per pound this week.

Mikael Verdyan, an analyst at FOREX CLUB, specially for ARKA news agency.
The opinion of the author does not necessarily reflect that of the agency. —0-

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