precious metals flash

Gold fell below 1640 again on Friday, following the Indian doubling of import taxes on Gold, before being saved by a quickly falling USD. The US market came in selling the USD on Friday, causing a short covering rally in EURUSD, which was further supported by a lower than expected Michigan Confidence number and a rumour that the EFSF might plan a conference call today, for a potential 20-30 year bond issuance. Gold met resistance at 1665 USD this morning in Asia and faces every 5 USD higher some chart point until the 1680 level would be cleared. Net longs in futures and options on Comex dropped a mild 456’000 ounces as per last Tuesday to 20.7 Mio. ounces. Palladium net longs regained what they had lost in the previous week and increased by 167’000 ounces. Most talked in European trading, was a large deal over the brokers, which saw the 6 week 1525 put trade in 620’000 ounces. The President of the Bombay Bullion Association, Kothari, said he would expect imports to drop by 35% in 2012 due to increased taxes, which would be a whopping 339 tons if came true. Gold should however trade with USD moves in the short term, where the latter has broken through short term support trend line and could give Gold some further boost.