By FXEmpire.com
The steady stance by the BOE and China was offset as there was no strong indication from Bernanke that further easing is imminent. Risk appetite sapped extremely followed from Bernanke comments that US having potential downside risk radiating from Europe. This would have hurt gold’s glory and its continuing rise with a modest fall of 0.99%.
Gold dropped from a high of 1642.15 to as low as 1559.35 and is currently exchanging at 1572.85 and silver has dropped to 28.12.
Asian stocks as well nudged down despite Japan GDP beat estimates early morning. Gold therefore is also likely to be under pressure after a critical imposition of Basel 3 norms ensuring cushion against uncanny financial shock and that may restrict easy cash flowing into the market and bidding safe assets price higher. So, not only equities and commodities but the entire risky asset classes may see shortfall of cash. Bernanke’s comment may be proved today when reports from Germany indicate narrowing down current account and trade balance.
However, the US trade balance may reduce its trade deficit as dollar has been appreciating significantly from April. Overall, market sentiment seems to remain weak with more pressure mounting from the Greek re-election on June 17th. And hence Euro weakness could take gold along the drive. We therefore recommend staying short for the metal at higher levels.
Silver futures prices are also quoting down even after China eased interest rate and reasons thereof are the Fed testimony. Asian equities have taken cues from the US and thereby trading well below prior closing despite Japan GDP beats the estimates at early morning. The Euro also fell after Fed indicated severe risk is emanating from the Europe to US. Hence, silver is exposed to a further downside for the day.
Bernanke’s comment may be supported today with reports from Germany indicate the narrowing of current account and trade balance. However, the US trade balance may reduce its trade deficit as dollar has been appreciating significantly from April.
Overall, market sentiment seems to remain weak with more pressure mounting from the Greek re-election on June 17th. And hence Silver may remain under pressure and we recommend staying short for the metal.
The affects and surprise of the successful bond auction in Spain, has not the full attentions of traders. Today, we should see some sort of a response, although the auction was successful, rates continued to climb and yesterday, Fitch rating services, lowered Spain’s credit rating several notches again.
Click here to read Silver Technical Analysis.
Originally posted here
