Gold $401 Silver $6.15 Friday 25 June, 3.30am Sydney
G'day. Finally we break out of the ranges that have held the metals in check the past few trading sessions. Silver was the standout, although Lead, Zinc and Copper all posted substantial(+3%) gains as well. Gold was the straggler being only up 1.5% on the day, but importantly, moved through the 200DMA which could see some good follow up buying in the next few sessions as breakout players, and others who may be looking for some longer/stronger confirmation of the break, join the buying. Maybe. Resistance becomes support and so we should hold $396-8 level on any initial weakness.
The silver move was quite dramatic, firstly through the $6 level and then through $6.10-12 levels. Solid offers appeared up near 6.20, and I think we may struggle again around the $6.25level. Something about this move has me feeling a little uneasy. I dunno what, but the gut is saying be careful here. Where to from here? Best guess I can make is a Probable test lower to $6.10 and then back up close to 6.42-46. It all depends on the timeframe you are looking at. I still have no doubt that we will see significantly higher silver prices in the coming months and years.
Gold went up strongly at the get go and then, as is becoming almost predictable, we get a few bucks off after the first hour and then resume the test of the topside. Playing the daily N ( up, down, up) has been profitable lately. Fund buying took us up through $400 and the weak dollar versus the Yen and Euro would have helped. The Aussie, Canada and Kiwi dollar were the star performers against the dollar. Some gold priced in Aussie terms was sold today at A$575 per ounce. Not huge volume and the selling has been completed. Best I can learn is that it is project finance based. I am looking to add to my gold positions on any dips below $400, but as always, keeping a close eye on the currencies. Not advice, just sharing the process.
The silver equities are all up nicely, which they should be with the underlying metal up over 5%. The equities have not advanced much more than the actual metal itself today but over the last few weeks we get an idea of the leverage that equities have over the underlying metal. For example, Silver Standard Resources (SSRI:NASD) is up 25% in 7 trading days while silver is up from $5.65 to $6.15 or about 10%. The Amex Gold Bugs Index (HUI) is up about 12% since 14 June when we touched 176 and now trade at 196.
I won't be in the office tomorrow as have some babysitting duties to take care of but will be monitoring from home and will try and throw a few buzzes into the mix... and I certainly won't be listening to Journey!!!
Who'd have bet that Spain, Italy and Germany wouldn't be in the final eight for these soccer championships.....
Have a great weekend...
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