Another quiet day for precious metals yesterday. Gold continues to face resistance at and around $1,650, while silver remains holed below $32. The most actively traded Comex gold contract, June, settled 0.7% lower at $1,639.60. US Mint sales figures for gold coins during Q1 show 210,500 ounces were sold – down 30% from 299,500 in the same period last year. Together with increases in the Comex silver stock and the drop off in gold and silver futures open interest, it’s reasonable to conclude that the froth seen in these markets during last spring and summer has well and truly evaporated.
This is no bad thing for the long-term vitality of either market. The fundamentals supporting the precious metals bull market haven’t changed over the last few months. Is it too late to buy gold? No it most certainly isn’t, and such price corrections and consolidation represent great buying opportunities.
Spain auctioned more bonds this morning, and though rates rose – from 5.4% to 5.7% – crucially this 10-year yield remains below 6%, which is the threshold at which economists reckon things start to get dicey. That said, late last year Italian yields shot well north of economists’ 6% comfort zone, and yet the combination of increased Fed-ECB swaps, LTRO, and a change of government in Italy was enough to suppress the yield spike. The Italian 10-year is now trading around 5.5%. Who’s to say that similar central bank actions can’t keep a lid on the Spanish situation as well?
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Gold Consolidation Continues: April 19, 2012
Published 04/19/2012, 07:17 AM
Updated 05/14/2017, 06:45 AM
Gold Consolidation Continues: April 19, 2012
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