Precious metals traded quietly yesterday as decent physical demand may be getting the “shorts” nervous, but overall light volume kept our market in a narrow range. On the positive side for precious metals, we have crude oil sharply higher as it is back above $60.00 and the USD has weakened on the back of comments by President Obama who said the USD is too strong and Bank of Japan officials saying the Yen needs to rally. Lastly, the Euro is back above 1.13 as uncertainty about Greece’s proposal for debt repayment appears to be unsatisfactory.
On the negative side, we have rising interest rates with the yield on the U.S. ten year bond now at 2.47 percent. In addition, a better than expected report on job openings in the U.S. raises the possibility for a strong June employment report which will support a rate hike by the FOMC. This morning finds gold leading the charge higher as short covering / buy stops were hit when the market broke above the 10-day average at $1,183.25. While silver is currently back above $16.00 it is not keeping pace as the gold / silver ratio now trades above 74.00. Look for gold to face stiff resistance from the 50-day average at $1,196.50 through the 100-day average at $1,205.20.