London Bullion Report: Platinum hits one-month high, gold advances

London, 17 March 2010 - Commodities posted solid gains Tuesday as expectations the Fed would reiterate its pledge to keep rates at historic lows for an extended period prompted an increase in demand for riskier assets. The CRB Index gained just over 1% as crude oil rallied over 2% while gold and copper rose 1.3%. US rate speculation kept the dollar under broad pressure across the day with the greenback closing lower against is major counterparts, down 0.65% against the Euro and Australian Dollar while Sterling closed with a gain of 1.3%. The EUR/JPY carry trade also gained 0.6%, a sign of increased risk appetite. Equities mirrored the increase in risk appetite with the Dow gaining 0.4% and S&P500 0.8%.

The Fed and Bank of Japan's announcement to keep rates unchanged in addition to the BoJ's 's decision to tackle deflation by doubling its bank lending program has given risk appetite a further boost this morning. EUR/USD has traded to its best since February 9th above 1.38; EUR/JPY is currently up 0.55%. Stocks are in positive territory overnight with the Nikkei currently up 1.2% and the MSCI Asia Pacific Index over 2%, European index futures are pointing to a broadly positive start. Ongoing debates on how best to support Greece's debt situation seem likely to keep markets in a volatile mood with Buba President Weber due to speak later today while economic data will show the minutes of the last Bank of England MPC meeting, UK Unemployment Change, US PPI and Crude oil Inventories. Fed Chairman Bernanke is also due to speak.

Gold continued to tread water in a narrow range across the early part of Tuesday before pushing higher in Europe as technical buying emerged as the metal probed above the 100-day Moving Average. Gold pushed initially to $1126 and remained broadly supported across the rest of the day, closing at $1124. Silver held pretty much on a par with gold across the day, trading to a high of $17.49 and closing up 1.05% at $17.36. The stronger Euro has given both metals a boost this morning with gold trading above $1130 and silver above $17.50. While strong overhead resistance remains and the risk of a reversal in Euro related sentiment could dent short-term sentiment both metals are poised to exit their current phase of consolidation and regain bullish direction as speculators and investors continue to diversify away from fiat currencies and treasury products.

Platinum and palladium closed modestly higher yesterday as a result of the broad commodity gains, closing up 0.5% and 1.5% respectively. Both remain supported overnight with platinum hitting a one-month high of $1637, and with gold and silver probing overhead resistance and fundamentals in the PGMs continuing to improve both may looking to challenge this year's high of $1655 and $472.50.

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