Gold under pressure yesterday as money from overseas investors poured into the equity markets. New record highs in the Dow and SNP quickly caused a selloff in the yellow metal as investors joined the momentum in equities looking for better returns.
Today our markets seemed to have settled down a bit as we see good buying in Gold emerge at the $1,330.00 level.
Financial advisors are flooded with equity orders and now we are witnessing outflows in the Gold ETFs, temporarily changing the direction of the funds. The Silver ETF investor seems to be ignoring the interest in equities, so yesterday the Silver ETF holdings reached a new high for 2016.
Gold, as I indicated in my Monday blog, technically has to hold the $1,332 level or a further sell off is expected. Silver seems to have less pressure on the price, but if gold settles below the $1,332 support level I believe
the silver market will head lower also and I expect it will test the $19.96 support level again as it did last night. Kudos to my technical friends as they called the silver support level right on the mark in overnight trading.
Some Wall Street traders are indicating that they still continue to buy on any pull back in the price of Gold. It’s nice to hear that there are traders still confident that Gold can rebound even with the equity markets making new all-time highs every day.
Only time will tell if the equity market can maintain this momentum. Some financial advisors tell me there is a lot of cash on the sidelines, but the majority of the cash seems to be here in the States. If overseas money dries up or if poor equity earnings hit the headlines, a Gold rally will quickly be back on the table.
UK physical buying is slowing down as Theresa May gets set to become Prime Minister today. Her election has brought some calm to the UK as her conservative style sits well with most Brits.
Have a wonderful Wednesday.
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