From the Trading Desk
The Bank of England kept its key interest rate unchanged at .50% and signaled that further stimulus will come in August to aid the post-Brexit economy. Economists had factored in an 80% chance that Britain would lower its benchmark rate in the wake of the UK leaving the EU. Its decision to maintain the status quo caught market participants off guard. The precious metals were already on wobbly ground during the overnight Asian session and the announcement by the Bank of England caused further liquidation. The selling pressure subsided by the time the US arrived and gold and silver rebounded moderately. Silver, yet again, held $20 perfectly but selling has consistently emerged recently on moves over $20.50.
We are at the cusp with metals right now. In yesterday’s Current Thoughts I said we would be range bound for a bit and then break out of that range. I do think the dollar will go higher but today the dollar was a bit weaker as the EU decided to keep rates unchanged for now. Probably not a good decision, but since when do central banks make good decisions. They are reactive, not proactive. They look at past data and make decision, and even then ignore much of the data with their constant rhetoric about higher rates.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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