Gold ETFs in Hibernation


"Precious metals markets were essentially stalled near previous levels. . ."

Precious metals markets were essentially stalled near previous levels and were seen quietly tracking investor sentiment following various economic data releases across the globe. The U.S. dollar managed a gain of 0.21 on the trade-weighted index, rising to 78.33 ahead of this morning's start in the markets.

Gold bullion opened its first September trading session showing a $0.90 gain at $951.80 per ounce. Direction is still lacking and moves have thus far been tentative and largely determined by developments in other markets. Internal dynamics still show poor offtake from India (it probably only imported 12 tons last month as against last year's 98) while the largest gold ETF remains in hibernation mode. Where the news to move this market out of its doldrums might come from, is anyone's guess at this time.

Analysts at Standard Bank group have offered up a technicals-based price scenario by which gold might break out of its current pattern and—if it manages to successfully close above $981 per ounce—shoot up to $1,325. Of course, the breakout could also turn out to be a breakdown. In that case, the bank feels that once support at $935 gives way, there could be a decline to anywhere between $800 and $850. Take your pick. We already know what the newsletter community and gold forums believe.

Silver started with an 11-cent loss at $14.79 per ounce, while platinum opened $2 lower at $1,236.00 per ounce. Palladium dropped $1 to ring in at $288 an ounce. Meetings between labour and management are on tap at South Africa platinum producers today. Other—unverified—news indicate that Russia may have exhausted its palladium stockpiles and is supplying the market from current production at this time.

China's first half lending spree resulted in the country's fastest expansion in manufacturing in nearly a year and a half. However, questions about the government's continued willingness to pump up the economy with liberal lending that will unquestionably result in more lethal bubbles continue among Chinese speculators. In any case, yesterday's victim of such apprehensions—copper—picked up steam following the news.

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