U.S. Econ Data Pressuring Precious Metals

Precious metals approach the end of the trading week pressured by improving U.S. economic data and supported by growing concerns regarding Greece. Yesterday’s better than expected U. S. retail sales report was followed this morning by a better than expected reading on the producer price index. Both economic releases are in line with what the FOMC is looking for with regard to economic activity and inflation. With the increasing likelihood of a rate hike coming sooner than later, unless this trend for good economic data suddenly reverses again, we could be looking at a USD that continues to rally and weighs on our market over the summer months.

Support continues to come from the sharp increases in physical demand on all dips as we have already seen this morning with the bounce in gold off $1,175.00. The issue within the Eurozone appears to be at the 23rd hour and growing more critical by the moment as negations between Greece and the IMF over loan repayments have broken off. An outright default could begin the process for Greece withdrawing from the Euro community, which should trigger a sharp increase for physical demand in Europe.

Have a good weekend,