Yesterday continued the recent run of better than expected U.S. economic data in the U.S., which kept a lid on gold and silver after both held support levels following the sharp sell-off. This morning finds our market trading on very light volume, but still holding support in gold at $1,275.00 and silver from $19.40 through $19.25.
This morning brings a speech by Fed. Chair Yellen at the Jackson Hole summit that is scheduled to begin at 10:00AM EST. The speech will not be broadcast, but as headlines are released volume and volatility should pick up. Physical buying was very impressive yesterday as those who stayed on the sidelines recently were rewarded for their patience. The question now will be what happens to physical demand. If demand stays strong we could see a short covering rally in the near term. If the buyers go back to the sidelines we are likely to see $1,250.00 in the coming days especially if the USD continues to strengthen. For those looking for a test higher gold is likely to see a pop if it breaks above $1,285.00 but runs into heavy resistance as it approaches $1,300.00.
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