From the Trading Desk
It’s been a very slow day so far with gold trading in an uninspiring $10 range. As expected, the European Central Bank kept rates unchanged and signaled the possibility of fresh stimulus later this year. ECB President Mario Draghi commented that the central bank stands ready to adjust the duration, composition, and size of the central bank’s quantitative easing program. This allowed the USD to gain against the euro while gold gently sold off lower. The 200 day moving average at $1,175 is near term resistance while $1,155 will attract bids on a further move south. Silver continues to consolidate under $16 with support well below here at the 100 day moving average of $15.25.
The dollar shot up hugely today but gold didn’t go down like I thought it would. I am confident it eventually will. The reason the dollar hot up was because the European Central Bank (ECB) under the guidance of Mario Draghi said they would extend QE. This naturally is Euro negative and dollar positive which normally would put pressure on the precious metals but today they did not.
We now have the higher dollar taking off that I have been predicting, and all we need is for gold to follow it’s normal path and fall lower. They typically are inverse of each other.
Treasury rates initially spiked down on the news to 2% on the 10 year again. This is something I have also been predicting. We can expect this to continue.
Gold is presently at $1,167.20 and silver $15.83. Gold will eventually fall hard with silver as the dollar moves higher and as I have said many times, fall below $1,000 an ounce. Stay tuned!
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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