Monday, February 9, 2015

Heraeus Market Report

Monday Feb 9, 2015

After the positive development of the Gold price in January (+8%) Gold had to put up with losses again last week. The market could realize gains due to the high price level and thus Gold had to at least partially lose its profits again. Meanwhile Gold had started promisingly into the new month and the 1,260 $/oz level was defended successfully again. It was US non-farm payrolls that had Gold break down from the then existing tight range. Consequently to the positive data from the US on Friday afternoon Gold fell by 2.5% to 1,229 $/oz. This reaction illustrates once more how much Gold depends on fiscal decisions in the US. With good economic development the planned interest increase comes to the forefront. Thus the latter is hanging over the market like a Sword of Damocles and lets Gold move into one or the other direction depending on the data situation and respective probability of a forthcoming implementation. Investors also withdrew support for the metal last week and ETF stocks reduced accordingly. Demand for small bars has also come back to normal levels. This morning Gold is trading at 1,240 $/oz. Despite of the slight recovery in the short-term downward trend we see support at the Low of last week for the metal. Resistance is at 1,250 $/oz and the market is now waiting for impulses for further developments. The comparatively high Euro-Gold level is continuously used in order to sell the metal.

After an initially quite stable week Silver got under pressure after the publication of the positive US non-farm payrolls on Friday afternoon. Also concerns about deflationary tendencies were resolved by higher than expected wage increases. Besides the Fed’s interest increase by the middle of the year which has become more probable by now mediation efforts in the Ukraine crisis as well as the willingness to compromise in Greece lead to a smaller need to hedge price risks in Silver and Gold. Silver is currently trading around the 100 day average at 16.70 $/oz. Next significant support should be at 16.00 $/oz while we see upside resistance at 17.48 $/oz.

Neither Platinum nor Palladium have been impacted by the Gold price development and gained in value in the course of the reporting period. Platinum opened at 1,241 $/oz and moved towards 1,257 $/oz at the end of the week. Platinum will continue to be strongly supported by the Automobile industry. It is amongst others announcements like the ones about the US auto sales in the past week which benefit Platinum’s outlook. Furthermore, the government in Zimbabwe announced that it may impose an export tax on unrefined Platinum. In the reporting period it was announced in turn that Zimbabwe’s government would revoke the Platinum export tax if the mines in Zimbabwe invest in its own refinery facilities in order to promote local refining. To what extent the idea of such an export tax will actually be implemented as well as be geographically spread and impact the Platinum price needs to be awaited. On the charts resistance is at 1,245 $, support at 1,242 $.