Week Starts with Economic Surprise

Precious metals begin the week with a bit of an economic surprise in that the recent run of strong U.S. data did not continue. This morning’s release of industrial production falling by 0.2 percent in May included a revision for April showing a 0.5 percent drop. The sluggish figures are likely tied to the strength of the USD and this will have to be factored in by the FOMC which could result in a delay of raising rates, which should cause the USD to move even higher.

Talks between Greece, the IMF and their European creditors ended shortly after they began over the weekend as uncertainty in the Eurozone continues to grow. The next meeting to address debt repayment is scheduled for Thursday. This morning finds gold and silver have already tried higher and lower since trading resumed yesterday and, while we continue to look for direction and a trend, perhaps this is a sign that this week will bring us greater volatility as events unfold in Europe. While gold and silver continue to find strong physical demand on the dips, the same cannot be said for platinum and palladium which continue to probe lower. This morning finds gold trading at a $95.00 premium to platinum. Keep a close eye global equities this week as the situation in Greece seems to be weighing heavily on the U.S. market this morning and sellers of equities may look at gold for ”insurance”.