gold

The Shanghai Gold Exchange said to raise margins on Gold and Silver on 20th January ahead of the Chinese New Year on 23rd January, while S&P shocked markets by downgrading 9 Eurozone countries, which sent everything lower including Gold. Sell stops got triggered below 1635 and 1630, however volumes remained rather confined, given the circumstance and the price recovered. The usual selling from Index rebalancing sent it again quickly below 1630 ahead of the New York close, before bargain hunting especially in Asia re-emerged. Looking at Futures and Options positioning as per last Tuesday on Comex, net longs increased marginally by 460'000 ounces, which do not include the rally to 1662 nor the wash out of Friday. Interesting to note are net longs on Palladium, that dropped another 72'000 ounces and stand at 462'000 ounces now, not far from the low seen on 9th September 2008, where they stood at 405'000 ounces. The U.S. market will remained closed today, due to Martin Luther King day, which should keep trading in tight ranges. Support on Gold should come in at 1629 today, while the 1648.10 February contract level should act as a resitance today, which is the 200 day moving average on the 4 hour chart.