The bias in gold remains up despite negative divergence with silver prices and news of continued outflows from gold and silver ETF holdings.
However, yesterday gold impressively managed gains despite another significant extension of upside action in the dollar and in the face of another higher high in US treasury yields.
There are some discussions in the marketplace that some form of crisis is ahead because of the unrelenting gold market gains and the only other major market reaction to a looming global flight to quality event is the surging US dollar...[MORE]
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Good morning. The precious metals are mixed in early U.S. trading.
U.S. calendar features EIA Data, & TIC Data.
FedSpeak due from Mester & Bowman.
While the dollar has retrenched from a fresh spike up new high for the move this morning, the bias in the dollar remains up to start today.
However, soft US housing data could provide a brief respite from the strong dollar for gold and silver longs this morning.
Unfortunately for the bull camp gold and silver ETF holdings continue to decline highlighting a lack of small investor interest in one niche of the metal markets.
On the other hand, Citi has doubled down on its bullish gold price forecast projecting gold to reach $3000 in the next 6 to 18 months...[MORE]
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Good morning. The precious metals are lower in early U.S. trading. U.S. calendar features Housing Starts, & Industrial Production (+0.5% expected).
FedSpeak due from Jefferson, Williams, Barkin, & Powell.
With gold and silver prices significantly higher overnight in the face of a very significant upward thrust in the US dollar, it is possible the markets are beginning to aggressively embrace flight to quality buying from rising economic concerns toward China.
In fact, overnight Chinese import, and export readings came in significantly below expectations which facilitates more anxiety toward an economy thought to have serious problems.
It is also likely that rising concerns of financial pressures on developing countries are fostering flight to quality buying of gold and silver in anticipation of a financial crisis in the emerging market sector...[MORE]
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Identifying where the gold buying is coming from is essential as not all buying is equal.
In strong hands such as central banks with a multi-generational view, the rally is 'high quality' and unlikely to be reversed, but with weak hands such as short term speculators, the opposite may be true. Two opposite outcomes.
And we are pretty confident we know who is behind the move...[LINK]
ZM Comment: The rise in gold, in the face of countervailing fundamentals has been vexing the market for several weeks now. Ross Norman offers an interesting theory on where the buying is coming from.
With the dollar this morning forging another higher high and reaching the highest level since early November, the currency impact on gold, silver, and copper remains negative.
Likewise, US treasury yields remain a burden with yields reaching the highest levels since last November with another higher high overnight.
While it is not clear what the direct ramifications are on gold prices, a precipitous decline in Chinese Consumer Price Index readings for March overnight suggests the Chinese economy is doing very poorly which could be a double-edged sword...[MORE]
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