Gold $384 Silver $5.75 Tuesday 15 June, 3am Sydney
G'day. Stuffed if I can make sense of this market today. Gold and silver had a fair day and the NY open saw silver up a percent and gold about square. The deficit numbers were atrocious but the response was muted, to say the least. Maybe everyone is waiting for the inflation numbers tomorrow. The focus has been on employment numbers recently, but it appears that the inflation numbers are now the flavour of the week as far as "important" releases go. Whatever.
India is still importing gold at these levels judging by the premiums in the major centers. The physical market is still very robust according to many of my sources. Gold is hanging around the $384 level although under pressure, for sure. Support is solid here but would not be keen to see a break of $380. Silver could well be on the way to re-test the $5.50 level although consumers are looking to add below $5.60. Not for the faint heart at present.
Someone decided that metal equities were seriously overvalued today. We have seen the Amex Gold Bugs Index (HUI) off some 4% today whilst there has been little to no downside movement in the underlying metals. Silver is actually up by over 1% in the early going, yet the main silver stocks are off some 6-7% thus far. The volume traded in many of the stocks is anything but huge. Maybe someone just wants to bail out of this sector and is just hitting any bids? CPI tomorrow obviously holds no fears for whoever is selling. Some of the South African golds have been whacked hard today too, even with a weaker Rand, which should be a positive for them. Hmmmm. The equities are suggesting lower metals going forward and they have been a great leading indicator the past few years, although it is a little fishy that the metals didn't start their selloff today, until many stocks had already been crushed. Talk about chicken and egg stuff.
Tomorrow's CPI could provide some impetus for metals and associated equities, but the current sentiment isn't very supportive of metals and therefore a good(low) inflation headline could see some carnage. I just can't see how it could possibly be anything but a nasty number. Then again, nothing would surprise me these days.
On Thursday last week, I inadvertently forgot to advise of any positions which elicited a few questions from readers. My apologies as I was in a big rush to get out of here and clean forgot the line on the posting. I wish to advise that at the time of writing I had positions in gold/silver/ssri/cde/paas/crude oil. I still have those same positions. Apologies again.
Enjoy the rest of your day...
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