We think the gold market is lucky to be holding above last week's lows in the early trade today given a fresh higher high in the US dollar and in the face of almost certain rate hikes from the US and Europe later this week.
In retrospect, investors remain cool toward gold and silver, with ETF holdings last week declining by 257,337 ounces in gold and by 6.4 million ounces in silver. Year-to-date both gold and silver ETF holdings are both more than 2% lower!
With the dollar rallying 160 points last week, the Thursday/Friday reversal in August gold of $40 was clearly deserved and likely sets the stage for more declines early this week...[MORE]
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While the dollar neared a downside breakout point overnight of 99.26, without a new low for the move, this morning's early gains in gold and silver could be difficult to extend.
However, gold ETF holdings saw a 2nd straight day of inflows with 49,017 ounces added yesterday. On the other hand, silver ETF holdings saw 2.1 million ounces flow out, bringing this year's net sales to 11.7 million ounces.
Gold and silver are likely undermined by a generally negative ongoing global view toward the Chinese economy with the Chinese government failing to hit the right notes on stimulus applications...[MORE]
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The path of least resistance is pointing down in gold and silver to start today with the dollar overnight initially posting a 4-day high and potentially poised to receive further lift from today's active US scheduled report slate.
In retrospect, the release of the Fed meeting minutes yesterday afternoon revealed some Fed members were in favor of a 25-basis point rate hike last month despite the Fed's ultimate decision to leave rates unchanged.
Given numerous indications from the Fed, they are data dependent, US jobs-related data over the coming 2 sessions will be quite important and likely to set the trend in gold...[MORE]
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