Chinese New Year & North Korea’s Nuclear Test
Given that mainland China is on holiday celebrating the Chinese New Year, it wasn’t much of a surprise to see gold lose $20 to kick off the week. Physical demand in Asia was all but absent as Monday’s trading session began and bids evaporated. Gold traded down to long term trend line support at $1,640 which it has also managed to hold above today thus far. This is a trend line dating back to May of 2012 and it has held six times. It should be closely watched as a potential pivotal indicator of gold’s short term direction. Gold was assisted overnight by news of North Korea conducting a successful nuclear test. The yellow metal tends to perform well in times of geopolitical turmoil and the revelation of North Korea’s test certainly helped pull gold off the lows of the day. It has rebounded $10 from the $1,640 handle and will look to close above yesterday’s settlement price of $1,648.50. In other news, platinum and palladium are trading higher in anticipation of Thursday’s Impala results. The market is clearly expecting an announcement of production difficulties.
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