Gold remains on the defensive

GOLD

With the U.S. Dollar now trading at a 2-month high and interest rates and equity markets strong, Gold remains on the defensive. Precious metal equities have taken the brunt of the attack, some down 3-4%. Trading volume on the commodity exchanges has increased as Gold and Silver declined less than 1%. I see major buying in physical Gold right below the $1,270 per ounce level, possibly a central bank. If the Dollar remains strong and the $1,270 level doesn’t hold today or tomorrow, it’s a good bet we may see Gold test the $1,250 level next week. At 11am PDT today, Gold is down $8 per ounce, trading at $1,269 per ounce on heavy volume.

SILVER

The Silver price is tracking Gold lower, reaching a low of $16.70 per ounce today. Breaking below the key $17 support level yesterday was a big negative for Silver. The next support level is $16.50 per ounce if Silver can’t move back above $17 by tomorrow. At 11am PDT today, Silver is trading at $16.79 per ounce, down $0.15 on normal volume.