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Today’s commentary may read very similar to last Friday’s, as gold and silver remain range bound, while volume continues to be below average. Platinum and palladium have again taken over the headlines this week as intra-day ranges and trading volume continue to be impressive. This week has already brought us the highest palladium price since August of 2011, as the market flirted with $830.00. Physical platinum continues to grow scarce and is supporting higher prices as witnessed by platinum producer Impala stating that their supply chain could run dry by the end of next month.
I have discussed in previous commentaries that I thought a bond market rally was coming which would support and assist in a gold/silver rally. Bonds have indeed rallied as the 10-year bond yield dropped below 2.50 percent this week. While gold and silver tried higher again mid-week they backed off very quickly from the first of several resistance levels above. Continue keeping a close eye on the bond yield in the days and weeks ahead, as I see the yield dropping to 2.25 percent which should continue to support precious metals and further assist rally attempts. Following up on previous discussions of the gold/silver ratio, I will conclude today’s commentary with this thought. I continue to look for gold to probe higher and test $1,335.00 – $1,340.00. If that turns out to be correct, I would further look for the gold/silver ratio, which currently stands at 66.80, to contract and move to 62.50 which would result in silver rallying $2.00 from current levels as it tests $21.35.
Good luck and have a good weekend,
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