OUTSIDE MARKET DEVELOPMENTS: In the long run, more and more money is chasing less and less products which is a classic formula for inflation. The longer-term fundamentals continue to look positive for the gold and silver markets but a short-term shift to a more optimistic view on equities and some easing in concerns for the banking industry may be seen as short-term negative forces.
GOLD MARKET FUNDAMENTALS: A recovery in banking stocks in Europe this morning and a positive tone to equity markets leaves the market vulnerable to short-term selling pressures. Ideas that other asset classes might out-perform gold over the short-term has added to the selling pressures and holdings in the SPDR Gold Trust have been unchanged since last week from a record high level and some traders believe that profit-taking may cause some redemptions soon. Talk from Bernanke that he has a plan to keep inflation under control as the economy recovers was also seen as a potential short-term negative force. The markets face new data regarding new home sales, Durable Goods and continuing jobless claims today. The economic sentiment seems to be shifting a bit more positive for the short-run as uncertainty over government action is beginning to come down some.
SILVER MARKET FUNDAMENTALS: Silver seems to have been trading exclusively as a precious metal recently and had a similar volatile price pattern to gold in yesterday’s trade. The market has penetrated the steep uptrend channel off of the January and February lows and this may have sparked some of the selling pressures. Testimony by Bernanke seemed to calm both economic and banking sector fears yesterday and helped spark the late break. The market saw a sharp break overnight as banking fears in Europe subsided and futures pushed to the lowest level since February 13th.
PLATINUM: The stock market bounce might support some life to the platinum market but short-term economic data should continue to show significant weakness in the world economy and buyers are reluctant to count on much improvement in industrial demand for quite some time. Look for April gold to gain on April platinum. Short-term resistance for April platinum comes in at $1,068.70 with support back at $1,014 and $988.90.