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Gold, Silver Remain In Decline

ByBanu Akbez
Published 06/10/2013, 03:15 AM
Updated 07/09/2023, 06:31 AM
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Last week started with an increase in the weak dollar and a slowdown in US manufacturing in May, disappointing growth in US private sector employment but the direction changed as investors looked for signals as to what the Fed will decide to do with its bond purchase program. The expectation is that perhaps the upcoming FOMC announcement will offer a clear signal as to when the Fed begin tapering its 85 billion USD a month in bond purchases. Additionally, bullish non-farm payroll data in the US on Friday pressured prices as well.

The Fed’s upcoming meeting is very important for the direction; some believe in the possibility of the agency slowing down its 4 years of quantitative easing whereas others don't abide by this expectation since the US economy remains weaker than most.

Gold
On a Monthly basis, it’s hard to believe the decline is over as long as price remains below the 1410 level. Breaking the 1,300 level might have also have a big impact. Be careful as price nears the June 2010 low of 1,196.50. On a weekly basis, it should not be surprising when there’s a reaction from buyers at the 1,365 level. This situation should not be viewed as the end of the decline. Resistance is at 1,420. I expect gold to start the first business day of the week with a decline.

GOLD
Silver
On a monthly basis, it’s hard to think the decline is over for Silver as long as it remains below the 22.20 level. Be careful of the16.50 level. On a weekly basis, it should not be surprising when buyers react to the 21.20-21.10 range as Silver heads towards the 20.00 level. In addition, I don't expect that the situation is signalling that the decline is over. Resistance is at 23.10. Silver will start the first business day of this week by going lower.

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