GOLD broke above 1400 level last Friday, after US job data showed a climb in unemployment rate to 9.8%.
The increase in unemployment rate also weakened the greenback further, as the increase suggested a persistent weakness that is fundamental to the US economy.
Additionally, this may also prompt the Fed to launch an additional round (or rounds) of quantitative easing in the near future.
This week, the Korean peninsula tensions and European sovereign debt crisis will remain as the main concerns for investors.
Technically, gold has broken a strong resistance level around 1400 regions last week, and closed the week very bullish at 1413 regions.
For this week, gold is likely to retest the all-time high at 1424 regions and consolidate. However, if the level is violated convincingly, the yellow metal may rally further and potentially reach 1455 regions by next week. This scenario is likely triggered by fundamental concerns.
Silver, on the other hand, hit a new 30-year high last Friday, and closed at high near 29.4 regions. Similar to gold, silver may rally further if the price did not come back below 29.3 regions, and may potentially reach 31.6-32.0 regions before consolidating.
Uncertainties in financial and geopolitical situations increase further the appeal of precious metals, such as gold and silver, as a safe haven.
Silver is also being supported by strong investment demand and growth in industrial consumption.
Meanwhile, WTI Crude advanced to a new two-year high at 89.3 despite an increase in US unemployment rate. The appreciation is mainly contributed by the weakening US dollar, as it is not so much fundamentally driven by factors such as economic growth.
The market also did not respond to the increase in crude oil inventories, which rose 1.1 million barrels to 359.7 million against forecasted decline of 0.8 million barrels.
This week, we reckon WTI Crude will likely consolidate and retrace below 87.0 regions, as the rally so far cannot be justified fundamentally.
However, further deterioration of the US dollar may pull the WTI Crude prices slightly higher this week to a resistance major level at 90.2 regions before consolidating.
Breaking above this level, the next resistance level will be at 100 dollar psychological level.
source: thestar.com
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