Gold $391 Silver $5.82 Friday 4 June, 2am Sydney
G'day. A very quiet day was enjoyed by the metals today. The currencies were a different story altogether. The Euro is very stable compared to about any other currency. The Yen crosses were all the rage today. The Aussie dollar got crushed again, but holders of gold down here don't give a toss.
The economic releases did little for the metals. Gold crept a little higher but got smacked down pretty quick smart. Same with silver, although silver appears to me to be less pressured. The interbank OTC markets have been relatively quiet, although the word about is that there is some large Aud/gold trades being effected. Producer hedging could well be the answer with gold up here at A$565+ an ounce. Dunno, myself, as I struggle to find anyone down here of the size required to seriously effect the market (apart from maybe Newcrest (NCM:ASX)) or Lihir (LHG:ASX).
This market is acting a bit strange, with little correlation between the metals and the currency moves. A couple months back, all anyone heard when gold did something, up or down, was that it is currency related. Doesn't fit in the current market action and am scratching my head as well. The open interest numbers haven't suggested a large liquidation of many gold bulls. Any ideas, anyone? Central Bank selling, maybe?
At midday in NY and gold has a tenuous grip on $388. Silver slipped quietly below $5.80 and associated equities are sliding lower too. This could get nasty, quickly (not advice). New lows are somewhat in the back of my mind and a definite possibility, although I am pretty confident that we won't get there too fast (without something unforeseeable from left field occurring). Looking at next support at $384-5. Silver should find bids around the 5.60 level, I think. Just opinion - as always.
The Amex Gold Bugs Index (HUI) is down some more at $190ish and not looking too healthy. Some nice trading opportunities for the fleet of foot, but nasty if you're on the wrong side. Risk management is so much more important in this price-action environment. Sometimes it is better to sit on the sidelines, safe and comfortable, than it is to actually play the game and expose yourself. The corporate activity mentioned yesterday is warming up. Bids are being repriced and it appears there is more to be heard from the antagonists.
Sorry to be so brief but things are heating up here and I had better sight the weapons as some nice targets appearing.
Enjoy the rest of your day....
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