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Precious metals traded quietly yesterday as decent physical demand may be getting the “shorts” nervous, but overall light volume kept our market in a narrow range. On the positive side for precious metals, we have crude oil sharply higher as it is back above $60.00 and the USD has weakened on the back of comments by President Obama who said the USD is too strong and Bank of Japan officials saying the Yen needs to rally. Lastly, the Euro is back above 1.13 as uncertainty about Greece’s proposal for debt repayment appears to be unsatisfactory.
On the negative side, we have rising interest rates with the yield on the U.S. ten year bond now at 2.47 percent. In addition, a better than expected report on job openings in the U.S. raises the possibility for a strong June employment report which will support a rate hike by the FOMC. This morning finds gold leading the charge higher as short covering / buy stops were hit when the market broke above the 10-day average at $1,183.25. While silver is currently back above $16.00 it is not keeping pace as the gold / silver ratio now trades above 74.00. Look for gold to face stiff resistance from the 50-day average at $1,196.50 through the 100-day average at $1,205.20.
This editorial has been prepared by Roy Friedman of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.