Precious metals traded quietly yesterday following Tuesday’s early sell off as physical demand and speculative selling offset each other. This morning finds that gold and silver have already tried it a bit higher and a bit lower from yesterday’s settlement prices, but there was no follow through on either side and as I finish today’s commentary, both are trading at yesterday’s settlement prices as we continue to look for direction. The USD has been in rally mode, which has weighed on precious metals and most commodities, but it is now approaching levels where traders may unwind positions that should help gold and silver retest $1,200.00 and $17.00.
Keep a close eye on the U.S. 10-year bond and crude oil markets as they may hold the key for the next move in our market. The yield on the 10-year bond is currently at 2.15 percent and has been drifting lower. A move in the yield back towards 2.00 percent should bring buyers to our market, while a jump in the yield above 2.25 percent will likely see precious metals pressured by speculative short selling. Crude oil, which was recently above $60.00, has fallen to $57.00 this morning as mounting inventories in the U.S. and concern that the summer driving season in the U.S. will be impacted by a weak economy have brought sellers to that market, which is likely to weigh on gold.