Gold Up Slightly In After-Holiday Trading

With the long weekend over, and with oil up to more than 85 dollars a barrel, gold moved up slightly in overnight trading. Initially, there was a rally that put a quick five dollars an ounce on the price, lowered by a little sporadic trading in Hong Kong on Good Friday. Subsequently, the metal stalled in a raggedly-bordered trading range between $1,124 and $1,126. The range lasted until about 6 AM ET, when it was first poked above and then rallied above in a more durable way. As of 7:50 AM ET, spot gold was at $1,127.80 for a gain of $1.40 since Thursday's close. The Kitco Gold Index attributed +$2.50 to predominant buying and -$1.10 to a strengthening greenback.

The U.S. Dollar Index did manage a gain after recovering from an initial slide when trading resumed. Sliding slowly initially, the drop accelerated until the bottom of 80.96 was reached as of 9:45 PM. At that point, a rally got rolling that gained traction around midnight. 1:45 to 2:45 saw an acceleration of the upturn to its climax at 81.3. Subsequently, the Index pulled back a little before pulling up. As of 8:06 AM ET, it was at 81.23.

A Reuters article highlights palladium's advance to a two-year high. Gold's trading so far has been thin.

Dealers awaited the release of an ISM survey on the U.S. services sector for March later on Monday, and a policy meeting by the Reserve Bank of Australia on Tuesday, expected to raise rates by 25 basis points to 4.25 percent.

"We are likely to see a further strengthening of the dollar ahead," said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore, referring to recent economic data such as non-farm payrolls that supported the dollar.

"All tightening measures, whether they come from Australia or China, have the effect of lower commodity prices. I am looking at the topside resistance at $1,140 and a very firm support at $1,110. Gold has more downside risk."

There's also a thinness in coverage this post-holiday Monday. A Commodities Online report attributes the earlier rise to hope for economic recovery:

Gold prices eased in thin Asian trade Monday, after advancing earlier on signs of global economic recovery, as markets reopened after Easter holidays.

The rest of the article which deals with gold contained the above-quoted item in the Reuters report about waiting for data.

As regular trading opened, gold slumped a little. Downward pressure resulted in the metal losing about three dollars an ounce between 8:15 and 8:40. As of 8:43 AM ET, the spot price was $1,125.80 for a drop of $0.60 since Friday's close. The Kitco Gold Index assigned -$0.80 to the predominant-selling category and +$0.20 to the weakening-greenback category. It took little more than fifty minutes for the two categories to flip-flop from positive to negative and vice-versa. The U.S. Dollar Index slumped a little after fluctuating: as of 8:50, it was at 81.14.

Today's trading in gold started off slow, but it will provide a gauge of the internal strength of last week's rally as volume returns to normal. Gold may stay where it is, even if it still has trouble getting and staying above $1,125-8. That would be good enough for the metal; it would show that last Wednesday and Thursday's rises, although on this volume, were legit.