Commodities | Mar 28 2013
It has been interesting looking at gold’s reaction to the Cyprus news. Initially, we saw an aggressive sell-off as investors uttered a sigh of relief. However, on future analysis we can see that a deal like that of Greece will cause more pain and suffering on the people of Cyprus. As such gold recovered most of its losses and closed the day on highs. The Cyprus deal really looks to cement the power base of those heading the ECB regardless of the pain Cypriot patriarchs will have to live through.
We continue to hold onto the metal. Stops can be placed below the low of Monday night at US1590.
On silver we still wait for a clear break above US29.30 which potentially opens the way for further gains.
Chart Point – Gold:
Technically, the picture for gold remains positive. As we have bounced off the low at US1590, and held US1600 the potential for a test to the topside US1640 is well on the cards. This is our preferred position. Momentum indicators remain supportive the metal. We still like the technical picture for the metal.
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