Gold and silver managed to push ahead

Gold and silver managed to push ahead yesterday afternoon, despite renewed dollar strength. Overnight and this morning, increased optimism over the Eurozone extended the upward move for gold and silver, with PGM also enjoying the benefits of a weaker dollar. Most of this optimism was inspired by the commitment from Chinese authorities to help resolve the region’s debt crisis. Strong physical buying (our Standard Bank Gold Physical Flow Index continues to rise), particularly out of India, has also helped push gold higher.

However, the buoyant mood has since soured as investors grow increasingly concerned over a possible Greek default and/or exit from the European Monetary Union. The catalyst for these concerns has been the cancelling of today’s Eurozone leader meeting, at which it was hoped that Greece would finally gain approval to secure the required bailout package. In light of these renewed concerns, the dollar is strengthening which is placing a dampener on Gold prices, a pattern which will most likely be extended into New York trading hours.

Gold support is at $1,716 and $1,706. Resistance is $1,733 and $1,739.