Gold: 1599.00 – down US $ 111 on the week. The ferocity of the liquidation seen last week was surprising surprise, but the relatively thin market conditions lent themselves to extraordinary moves. There are quite a lot of analysts and commentators who are predicting the end of the bull market, but ENBD analysts do not subscribe to this scenario, at least not yet. The situation in the US, and more importantly in the Eurozone, will stay relevant for some time to come. The world economic picture looks a little brighter, but the looming recession in the Eurozone makes it difficult to view this as more than a temporary phenomenon. Physical buying in Dubai and UAE market seemed as finished for the year, but on Thursday, 15th December there was excellent buying from customers resembling strongly the heydays in August/September. Customers obviously view the prices under US $ 1600 as a bargain. Physical gold was trading recently with a discount of up to US $ 1 under London Fixing, but this discount has been eliminated during the trading of the last couple of days. The physical markets experiences lately a down-change a trend, but hopefully it helps to put a bottom in place, at least in the short term.
EFP Spot Gold to December Comex: $ 2.30
ETF: Holdings down to 2420 tons overall
Support: 1562 and 1535
Resistance: 1640 and 1665
OUTLOOK: Neutral
Silver: 29.70 – down US $ 2.48 on the week. Silver was outperforming gold again on the downside with prices sliding 12.5 per cent at its lowest level (28.15). The price levels recovered to a slightly more respectable US $ 29.70, but silver will remain totally dependent on the direction taken by gold, according to ENBD. The investment community has abandoned silver and it is very much likely that silver will simply act as an amplifier for gold and more sporadically for the Platinum Group Metals (PGM`s).
Option volatilities midrates: Silver atm (at the money)
ETF: The total holdings 14850 tons
Support: 28.12 and 26.52
Resistance: 30.80 and 31.65
OUTLOOK: Bearish
Platinum: 1415 – down US $ 95 on the week. Platinum has faltered again during the last week, but the liquidation in gold was the major contributing factor to this. Platinum looks vulnerable and set for testing lower prices, which might attract some buying early in 2012, but we do expect more downside activities in the remaining two weeks of the year. The supply and demand outlook for platinum looks significantly less optimistic than for palladium, and that is the major reason for the recently shown weakness.
ETF: Holdings are 44 tons.
Support: 1380 and 1335
Resistance: 1480 and 1515
OUTLOOK: Bearish
Palladium: 621 – down US $ 61 for the week. Palladium was doing well until the gold liquidation brought its progress to a screeching halt. Palladium has still fared better than all the other precious metals over the course of the last few weeks, but the positive momentum has received a reality check. The 2012 outlook for palladium still looks better than the outlook for platinum, but we might have to wait for the very beginning of 2012 before we find renewed interest from the investment community. The industry-side has already finished for the year but the expected supply deficit for 2012 should give some early positive impetus.
ETF: Holdings are 54 tons.
Support: 600 and 568
Resistance: 650 and 675
OUTLOOK: Neutral
Precious Metals Report: Gerhard Schubert, Head of Precious Metals, Emirates NBD
