Despite a continuation of mixed news, but with a bias towards weak economic data, gold and its cousins have not been able to rally and are beginning to feel like we are going to see lower prices. Ahead of next week’s FOMC meeting on the 28th and 29th the committee will be discussing weak readings on new home sales, manufacturing, durable goods and rising unemployment claims. From my perspective the June rate hike is off the table and a hike in September is far from certain.
Despite the data, which is supportive for precious metals as it has weakened the USD a bit,for the second half of this week our market feels vulnerable to the downside as overall volume remains low and physical demand, while picking up a bit the past few days, is not impressive. Look for gold and silver to test $1,175.00 and $15.50 where physical demand should begin to pick up and support the market. If we break below these levels it could be a quick ride down to $1,150.00 and $15.00.
Have a good weekend,