Gold and silver, as they have done the past few weeks, have traded on a steady tone for the first half of the week. Despite interest rates rising as the bond market sells off, the USD weakened a bit yesterday providing the fuel for our market to probe higher. On the encouraging side, physical demand continues to pick up despite gold and silver continuing to trade in a well-defined range. On the concerning side, overall volume is falling as ETF, Futures and OTC volume contract. This morning’s spike higher comes on the back of very weak U.S. economy data.
The closely watched retail sales report missed the target badly and further data showed that the prices U.S. consumers paid for goods imported into the U.S. fell for the tenth straight month. The continuation of weak data on the consumer side of the U.S. economy should put to rest any discussion of a rate hike by the FOMC in June and will severely impact what they can do in September unless there is a very significant change in consumer spending as the weather hopefully improves throughout much of the country. On the technical side, all eyes are on gold as it battles with very well defined resistance between $1,210.00 and $1,215.00. Silver continues to impress and perhaps a move towards $17.50 will give gold an added lift.