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OUTSIDE MARKET DEVELOPMENTS: With the US equity market attempting to show some positive action early, the US Dollar showing initial weakness and oil prices higher it would seem like outside market action today is providing some fresh support to gold and silver prices. In fact, despite talk about rising risk appetites and buying fresh interest in the Pound, Canadian, Swiss and Euro, the precious metals markets don’t seem to be that concerned about flight to quality liquidation pressures. The US economic report slate today carries the US Trade and Budget figures and it is possible that expectations for those readings are providing some early support to gold and silver prices. Many metals traders are thought to be watching for a further slide in the June Dollar index below 82.00, while others suggest that a June crude oil trade above the psychological level of $60.00 could be a development that ratchets up inflation expectations in the precious metals markets. In short, a number of outside market forces are potentially nearing critical levels and therefore traders look to take quite a bit of interest in outside market forces.
GOLD MARKET FUNDAMENTALS: Apparently the gold market this morning wasn’t that disappointed in talk of mostly slack Indian physical gold demand overnight. It is possible that gold is garnering some fresh speculative interest from the rebound in equity prices and the residual strength in energy prices. In fact, it is even possible that gold was lifted in the wake of news of record April Chinese imports of iron ore and copper! While the gold market hasn’t been definitively lifted by weakness in the Dollar recently, seeing the Dollar slide to the lowest level since late December seems to have rekindled some currency related gold buying today. Surprisingly the gold market has largely discounted negative fundamental dialogue flowing from Gold Fields Mineral Services, which apparently presented a bearish opinion for both gold and silver at a conference. The bulls will suggest that current conditions for gold might not be that bullish, but many classically orientated bulls in gold are seemingly very hopeful that unprecedented global money supply expansion, quantitative easing efforts and raging budget deficits are an inflationary dream. The bear camp will suggest that residual slowing and lingering deflationary threats will continue to favor them in the long slow road to recovery.
PLATINUM: With a big range down move in the prior trading session, the July platinum contract would seem to be fighting an ongoing liquidation tilt. However, very impressive action in silver and crude oil would seem to provide the platinum market with some fresh support and that in turn could make the $1,120.7 level a critical support zone. Like the gold market, platinum seems to need a definitively up beat macro economic outlook to get back into a bullish posture.
