Precious Metals Under Slight Pressure

Markets this morning under slight pressure after gold failed to reach the $1,200 level. Wall Street traders’ wish list for the week was to test the $1,200 level to see if the market would accelerate from there. Thanks to the Far East selling overnight in precious metals, traders look for action in other markets for the time being. Everyone looking to Washington on the debt ceiling discussion for news that might bring a bid to the market again.

Retail sales sluggish as the market becomes range bound. Retail investors still investing in equities as they enjoy a three week rally in the Dow and S&P.

I expect this to be just a bump in the road as the buildup of the open interest indicated last week that there were plenty of new longs jumping in. Traders still eyeing Oct. 27th. as options expire and I expect that gold traders will try to test the 1200 level before the expiration date.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.