Against our expectations, gold pushed higher on the back of the much weaker US dollar. After US GDP data showed that the US economy had contracted only 1% in Q2:09 (consensus was for a 1.5% contraction), the greenback depreciated quickly, from USD1.4100 to USD1.4250. The New York gold market was caught short, and short-covering helped push gold above USD950.
Should gold stay around $955 today, we expect decent volumes of gold scrap to enter the market. But at these price levels, resistance to a move higher is once again strong. We see resistance at USD960 – USD962 and USD970.
Support is at USD940 and USD923.
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