London 25/07/2011 - Gold rebounded to a fresh all-time high on Monday morning, underpinned by fresh safe-haven buying triggered by further uncertainty in the financial health of the eurozone and the US. Spot gold rose 1.4 percent to a fresh all-time high of $1,622.20 at one stage - it was last at $1,619.10/1,619.70 per ounce, still up $19.10. On the charts, the next upside target is now pegged at $1,650, while support stands at $1,610 and the uptrend line (UTL) at $1,600. “Expect the upward trend to continue and expect dips to the UTL to be well supported,” FastMarkets analyst William Adams said. Gold’s upside was temporarily halted last week on profit-taking pressures around the EU agreement on a new rescue package for debt-stricken Greece. “Safe haven flows have not ebbed yet as there is still some uncertainty about the details of the EU aid package for Greece,” broker Credit Suisse said. “Moreover, strong technical momentum and the unresolved US debt ceiling issue [are] keeping interest in precious metals elevated.” The US dollar was steady at 1.436 versus the euro, with both currencies under siege by uncertainty surrounding the sovereign debt situation. Earlier today, rating agency Moody's downgraded Greece by three notches, pointing out that the bailout plan would involve “substantial economic losses” for private investors. Gold was also supported by news of another failed attempt of US lawmakers to raise the federal debt limit over the weekend and speculations of possible downgrades of sovereign debt by rating agencies, broker Fairfax noted. A drop was also seen in gold speculative short positions, which was an encouraging sign, according to broker Standard Bank. “However, at 127.8 tonnes, this is still way above last year’s average of 90.7 tonnes,” it said. “This still points to a gold price that is vulnerable to shifts in investor sentiment. Our tactical view on gold remains neutral, based in part on weakening physical demand at current prices.” SILVER BREAKS ABOVE $41 FOLLOWING GOLD HIGHER Silver climbed 2.5 percent to its most expensive since May 4 at $41.05 at one stage, pushed higher by all-time highs in gold and consequent safe-haven flows. It was last at $40.85/40.90 per ounce, still up 84 cents. The metal also benefitted from positive technical signals - the next resistance stands at $41.07 and then $41.76 on the charts. “The recent show of strength suggests that silver has embarked on another rally,” FastMarkets’ Adams said. “The dips from last week were also well supported, all of which looks bullish.” Platinum rose briefly above $1,800 to a new best since June 15 at $1,801 at one stage overnight before settling at $1,784/1,794 per ounce, still up $10. Palladium, however, was down $2 at $803/808, having hit a six-week high of $812.50 on Friday. “Platinum and palladium responded less positively to the situation in the US, reflecting their relatively greater exposure to fundamentals,” a trader said. Net long speculative interest on Nymex in palladium, however, has climbed steadily to exceed 1.6 million ounces for the first time since March, indicating growing investor confidence in this metal, he noted. On the supply side, output from South African electricity provider Eskom is threatened by a strike in the coal sector that started on Sunday. The state-run utility supplies 95 percent of power to the country.

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