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Home Market Updates Daily fundamental analysis European Opening View - Silver closes Q1 with solid gain; markets await payrolls
European Opening View - Silver closes Q1 with solid gain; markets await payrolls

2011-04-01 06:48:28

Further gains were seen in the precious metals Thursday with the complex closing up 0.6% as solid rallies in energy and grain prices stoked inflation concerns; a degree of month & quarter-end window dressing was also evident. By far silver was the strongest performer across the first quarter of 2011 gaining 22% compared with gold's 1.1% gain; platinum finished little changed from the end of 2010 while palladium was down 5% following the recent liquidation of investment and speculative holdings.
The CRB Index finished up 1.6% as WTI crude rose by over 2%, corn 4.5% and wheat over 5%. In the currencies despite more debt woes in the Eurozone, after the results of a stress test revealed four of Ireland's largest lenders need to raise a further €24bn in capital, the euro settled in positive territory, up 0.35% against the dollar and yen. In spite of the positive tone in commodities US equities saw a more lacklustre day with both the Dow and S&P500; finishing down around 0.2% as book squaring emerged.
The start of a new quarter and a busy agenda of economic data could see a volatile day, particularly with the health of the manufacturing sector in numerous countries in the spotlight with Manufacturing PMI readings due from Australia, China, Japan, UK, EU and the US. However, the release of US Non-Farm Payrolls is likely to dominate with the US economy expected to add a further 191,000 jobs last month.
A weak payrolls reading is likely to be initially negative for most of the precious metals with the PGMs in particular vulnerable to re-test recent chart support if the data suggests the US economy is still not generating sufficient jobs growth. Gold though should continue to find good dip buying interest, and should the data prove strong it could push the metal towards the $1450 mark as jobs growth and rising raw material costs fuel inflation concerns.