Yesterday I said that we may get a move higher sometime this week. We had an intraday reversal for both gold and silver after a move by market makers to try and scare out weak hands. But we did not break the lows of last year.
I wrote this in the Current Thoughts section yesterday.
We must keep in mind that nothing goes straight down though and I would expect a move higher sometime this week. If we do get a move higher it should then be followed by a break of the lows. We did get a little bit of a rebound at the end of the day today with gold rallying $5 and silver 20 cents.
The USD traded at a 14 month high versus a basket of currencies earlier in the day and then settled to down a few cents. The Sterling took a hit against the USD with traders selling the currency over growing concerns that Scotland may secede from the United Kingdom. The Japanese yen also reached a six year low against the Dollar. All this USD strength has translated into liquidation for gold, which was approaching a three month low before the upturn. With a bank holiday in Shanghai and Hong Kong early this week, physical demand in Asia has been lacking and this could have something to do with the volatility. Asian markets returning in the latter part of this week should help buoy gold a tad. Technical support for the yellow metal is coming in at the triple bottom of $1,240. Silver is steadily grinding lower under $19 and next support is coming in at the low of 2014 at $18.65.
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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