(CEP News) - Gold prices are hovering around key support levels, which some commodity strategist say is a sign that prices could continue to move higher.

Wednesday has been a volatile day for commodity markets. Just head of the North American open gold prices hit session highs at $922.90 an ounce. However growing positive sentiment has helped to drag prices lower. CBOT spot prices remain near session lows trading at $910.

Reports that the Chinese government will add more money to its existing $585 billion stimulus plan and a stronger-than-expected PMI report helped boost positive sentiment overnight, which has carried over to the North American session.

Gold prices have fallen almost $100 since breaking through $1,000 on February but the drop hasn’t impacted the overall trend according to some strategists.

Ashraf Laidi, chief market strategist from CMC Markets said the latest decline in prices is well within the current upward channel. He added the big support for gold price is the fact that central banks continue to cut interest rates around the globe.

“Only a breach below 888-887, will cast serious doubt on the current bull run,” he said.

Jimmy Tintle, futures broker at Transworld Futures.com said with gold prices hovering around key support he is waiting for the close to determine the trend. A close below 906 could lead to a retest of 800 and a close above would confirm the current uptrend.

“Right now I think gold prices are a good buy at $906 but I think it’s better to wait for more direction,” he said.

Zachary Oxman, trader at Wisdom Financial agreed that prices appear to be a good buy at $906.

“I think at $970 and $980 prices are a little overbought and I was looking for a pullback,” he said. “I am comfortable at these prices and it might be a good opportunity to add to a position.”

WTI Crude oil is up $2.88 to $44.53 while ICE crude oil is trading up $2.09 to $45.79.

Meanwhile, ICE RBOB gasoline futures are up $3.32 to $131.94 and Globex natural gas is unchanged at $1.26. Heating oil at the ICE is up $3.28 to $121.24.

In the mining sector, spot gold is trading down $10.11 to $906.17 USD. In Canadian dollars, gold is down $25.07 to C$1159.69. Silver contracts at the CBOT are up $0.02 to $12.84.

Bloomberg’s index for base metals is up 5.75 points to 116.53. Wheat futures at the CBOT are up $21.25 to $523.00.

All data taken at 1:16 p.m. EDT.

By Neils Christensen, neilsc@economicnews.ca

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Posted in Categories: Canada, Commodities, Economy, Eurozone, Releases, USA.

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