Gold enjoyed considerable upside during US trading at the end of last week

Gold enjoyed considerable upside during US trading at the end of last week, led mostly by silver which was buoyed by what appeared to be fund buying. As the latest CFTC data attests (see today’s Focus), ETF buying of silver did show a marked increase over the past week. This morning, the complex continued to push higher, despite the absence of Asian players
away for the lunar New Year celebrations (China, Singapore, Malaysia and Indonesia). Focus has shifted back to the Eurozone debt crisis which is seeing a return of some safe-haven interest, for once not dampened by a strengthening dollar.

Whether this upward momentum can persist, will largely depend on dollar movements. Gold support is at $1,659 and $1,641. Resistance is $1,681 and $1,685.