Gold and silver were on an upward trend during most of the last week. The speech addressed by Mr., Bernanke did not create much impact in the market. Now most traders and investors are waiting for the next FOMC meeting at the end of January. All eyes will be glued on the Fed's decision to adjust its policy.
Gold ended at $1687 per ounce at the end of the week and silver increased by an average 3.83 per cent this reaching $31.56.
Gold and silver prices were mainly affected due to the data published last week, namely China GDP growth, US retail sales, US jobless claims and many more. The Chinese GDP growth data and the US economic progress report may have contributed to the rally of commodities.
The same trend is continued to expect this week. As mentioned before, gold and silver price volatility will be dependent on the first FOMC meeting of 2013. The meeting might show if the FOMC is planning to slowdown its monetary expansion.
Moreover, the QE3 program is starting to have some positive effect on the prices of gold and silver. The uncertainty around future steps U.S policymakers will take vis-à-vis spending cuts and debt ceiling could keep contributing to the rally precious metals in the coming weeks.
Bullion traders could also be affected by the EU summit. Demand for gold in India may be positively affected if the Indian Rupee will continue to strengthen against the dollar. These factors could potentially keep the pressure on the U.S. dollar to the downside, while possibly making gold and silver coveted safe haven assets for investors.
But as I stated last week, the main metal that has caught the glimpse of the investors is 'Platinum'. Platinum remained in the limelight after news abut production from the world's largest platinum miner pushed prices to their highest levels since early October. Outlook for the platinum group of metals is bullish in general and the news of supply disruption has added the price positive side of platinum
Given the 8.5% rise in the white metal since end of December, several market watchers said a pullback is likely, but that the bullish backdrop for platinum makes a drop in price a buying opportunity.
Gold, meanwhile, has meandered for this year, but with the gains in platinum and the yellow metal’s ability to hold support in the $1,660s an ounce area, market watchers said gold could be ready to rally if it can decidedly break through stiff resistance at $1,700. Gold should see resistance at the 55 DMA of 1697, followed by the psychological 1700 mark and more importantly the 1707 bear trend channel established since the beginning of October 2012. Support comes in at around 1675, the most recent uptrend channel and 1667.50, the 200 DMA.
