Precious metals began the week yesterday with a move higher on the electronic trading platform, as gold and silver were both bought aggressively. The catalyst for this was dovish comments made by Federal Reserve Vice Chairman Stanley Fischer who addressed an IMF / World Bank Conference. The comment that received the greatest attention was this one, “if foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise”. The interpretation is that the Fed policy makers are concerned with the sharp economic downturn in Europe and they are not anxious to see the USD rally further.
A delay in interest rate hikes and at a slower pace than previously anticipated should be bullish for gold. All four precious metals recorded sold gains last week but as last night showed again the spike higher in prices continue to be short lived as gold and silver are now trading $10.00 and $0.30 respectively below their overnight highs. This morning finds gold and silver in the black while platinum and palladium are below Friday’s settlement on light holiday volume as precious metals look for direction from U.S. equities and crude oil which most commentators who weighed in over the weekend expect to continue falling. In the short term gold support can be expected low $1,220.00's through the mid-teens while resistance appears to be building from the upper $1,230.00's through mid $1,240.00's.
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