“Precious metals eased on Friday following the ECB’s 25bps rate hike decision. Most investors were looking for signs of whether the expected ECB rate hike would sound the call to a tightening cycle by the Bank.” said a report by Standard Bank. With the ECB’s monetary policy public statement less hawkish than expected, the dollar strengthened from an intraday low bid, at $1.5909, to $1.5683 in late afternoon New York activity — which exerted some strain on precious metals as market uncertainty intensified.
Speculative market activity saw crude oil prices hold steady at record levels on medium to long-term supply fears with WTI crude climbing to an intraday high bid at $145/bbl before settling at $144/bbl in New York — ignoring gains in the dollar. This should further anchor global inflation expectations and with equity markets remaining under pressure, precious metals should remain an attractive haven for investment funds.
Gold range-traded between $945 and $941 through Asian trading and was then bid lower, at $939, at the London AM fix. Benign London market sentiment saw the metal slip to $934 at the PM fix. The trend continued in early New York trading, with prices touching a low bid, at $926, before rising to $932 at the Friday afternoon close. Primary support was at $927, with $918 and $900 as possibilities. Primary resistance was at $945, with a secondary resistance band at $954 – $972.
“US labour market data came in weaker than expected — non-farm payrolls fell 62K in June against consensus expectations for a 60K decrease. The unemployment rate was unchanged at 5.5% m/m. Indications of US labour market weakness cannot be ruled out,” said the report.
Silver shadowed gold throughout the day as LME copper prices came under pressure; being bid at $18.27 at the New York close. Support for silver is at $18.02 today, with $17.77 and $17.30 as possibilities. Primary resistance is at $18.49, with a secondary resistance band between $18.71 and $19.18.
Platinum was bid softer, at $2,025, at the New York afternoon close. The ECB’s decision to raise rates by 25bps could exert further strains to European growth expectations which should keep market sentiment subdued amid industrial demand growth concerns.