Gold And Silver Test Support And Rally Back
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Stuppler & Company is proud to provide our clients this Weekly Market Report (WMR). The report gives you my overview of the prior week’s precious metal and rare coin market activity and news. In each WMR, I share the current status of Gold and Silver along with their support and resistance levels. |
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This Week's Headlines: |
Last week was truly ugly for Gold investors, as it was down $38 per ounce, closing the week $1,978 and under the key $2,000 per ounce level.
What caused this Gold market’s decline was uncertainty.
Between numerous statements by Federal Reserve officials about the direction of Fed Funds rates, and mixed news coming from Congress about a debt ceiling agreement, nothing is certain. However, the professional traders focused their attention on the U.S. Dollar Index, which increased to over 103 during the past week, which is a 2% increase in the value of the U.S. Dollar, or a decline of $40 in Gold value.
During last week, Gold showed excellent price support above $1,950 per ounce, and right now Gold could easily move back above $2,000 on any news that there is not going to be any agreement on raising the debt ceiling until after June 1st.
Last time we failed to raise the debt ceiling was in 2011. During that time the Treasury had to decide who to pay with funds available. They selected foreign bond holders over federal employees. Many government employees from the military to the national parks didn’t receive a pay check. If we were to default on our debt, it would lead to a global financial disaster and allow China’s Yuan to become a more stable world reference currency.
In 2011, between the months of August and September, the Gold price increased from $1,621 to $1,920, almost $300 in a month, while U.S. equity markets dropped 20%. Depending on our politicians, we could see history repeat itself.
Today: Gold has been trading in the $1,970 to $1,980 area today as we await news from a meeting between President Biden and Speaker McCarthy. Movement on legislation for passage of a debt ceiling will give all financial market some direction. A stronger U.S. Dollar is putting a little pressure on precious metals.
In the face of last week’s $38 decline in the Gold price, Silver showed excellent support above $23.50 and closed on Friday at $23.92, down $0.09 per ounce for the week on excellent volume.
Today: Silver traded overnight in Asia and Europe just below the key $24 resistance level. As Gold trades in a tight range under $1,980 per ounce
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