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OUTSIDE MARKET DEVELOPMENTS: Asian and Indian gold prices were flat this morning following a strong day highlighted by a strong forecast for Chinese annual growth. Bullion demand is expected to remain buoyant with prospects for a surge in Chinese growth and anticipated Indian demand during the post-Easter wedding season the focus. The dollar is moderately lower this morning, with end of the quarter profit taking cited and the EU/Greece debt problem easing for a moment with Greece raising funds through the sale of debt. Data was mixed overnight with Japanese February industrial production falling 0.9 percent, however, the accompanying survey indicated output will rise in March. Japanese household spending fell 0.5 percent in February against a forecast for a 1.5 percent rise. Investor demand for gold was apparent on Monday, with the SPDR Gold Trust holdings up 5.176 tonnes, totaling 1,129.823 tonnes. This is the highest level of holdings for 2010 and very near the June 1, 2009 record high of 1,134.03 tonnes. The dollar will likely be a heavy influence on gold today with the June dollar index flirting with key settlement support at 81.345. Focus will shift to U.S. economic data, with Consumer Sentiment expected to rise to 50.0 this morning.
GOLD MARKET FUNDAMENTALS: The forecast for a near term surge in Chinese growth, a softer dollar as the EU/Greece debt crisis moves to the 2nd page for a moment and the forecast for Chinese gold demand to double in the next decade could keep gold well supported on pullbacks. The Indian wedding season is a positive as post-Easter Christian marriages are expected to firm demand, and renewed interest in the Spider Gold Trust could trigger more U.S. investor demand as gold captures headlines.
SILVER MARKET FUNDAMENTALS: Silver is a bit more focused on the health of the U.S. economy. Expect silver to trade closely with today’s U.S. equity market. The focus for silver traders will be the 9:00 AM cdt release of Consumer Sentiment. Traders are looking for a reading of 50.0, up 4 points from the previous month. Japanese data was mixed and did not offer overnight direction.
PLATINUM: The platinum market is sensitive to Chinese growth and currently is in a strong position to challenge higher levels following the government think tank forecast for higher than expected GDP. Global equity markets will be closely monitored by the platinum trade, but the bull camp is in control of this market and the prospects for new highs will become a reality if U.S. economic data is strong this week. The market is also benefiting from a weaker dollar and better than expected industrial EU sentiment. Platinum still has potential to move toward and past the 2010 highs. The March highs are the next target at $1,644.50 and $1,654.
