GOLD & SILVER PRICES BOUNCE BACK AFTER NEGATIVE NEWS

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	Gold, Silver Post Sharp Gains On Inflation News
	Gold and silver prices are solidly higher in midday U.S. trading Wednesday....Jim Wyckoff
	Citi Thinks Gold Is Likely To Reach As High As $3,000 Over The Next 12 Months
	Gold prices could surge up to $3,000 over the next 12 months, Citi analysts said....Vahid Karaahmetovic
	China Doing A Chuck Norris On Gold, Waiting & Watching
	After China bought zero gold in May, gold bugs say they'll be back....Eamonn Sheridan
	UBS: Gold Dips To Be Bought, Not Sold UBS: Gold Dips To Be Bought, Not Sold
	In a note Monday, UBS analysts advised that recent dips in the gold price are opportunities to buy, not sell....Sam Boughedda
	Is A Major Physical Silver Supply Squeeze Developing?
	At the COMEX market close Wednesday, June 5, the spot price of silver was up almost 25 percent from where it settled at the end of last year....Patrick A. Heller

Resilience is the word for Gold this week. We started the week at $2,311 per ounce and were hit with two major negative announcements. First, it was China saying they have halted all Gold purchases from May onward, after being a major buyer for the past 15 months. Second, Federal Reserve Chairman stating on Wednesday that there may be only one drop in the Fed Funds rate this year, instead of the three drops forecasted earlier. Both of these facts could have easily dropped the price of Gold to $2,200 per ounce, but the lowest Gold reached was $2,287. Now, the buyers are back and the professional traders are moving back into the Gold market.

Over the past fifteen months, China has been an aggressive buyer of Gold on the world markets. In many cases they outbid many of the other central banks. Now, Thailand, India, Singapore, Turkey, Kazakhstan, Czech Republic, Poland, and five other central banks will have an opportunity to exchange their dollars for Gold without having to outbid China. I don’t see any decline in Central Bank Gold purchases for the balance of the year.

Now that we have tested the key $2,300 support level, I expect to see Gold trade between $2,300 and $2,400 for the next month building a firm base for the next leg higher of $2,500 coming before October. Another test of the $2,300 is possible but should be short-lived. Of course, any major event or news that directly or indirectly affects precious metals could change my timeline.

Gold closed last Friday at $2,333 per ounce, actually up $38 for the week. Trading volume is holding, but I expect it to drop over the summer months.

Today: Gold has traded today between $2,307 and $2,333 per ounce as it sees some profit-taking from Friday’s increase. Chicago Federal Reserve President Austan Goolsbee said Friday that inflation data released last week for May was “very good” but that policymakers need to see more months like this to get to the central bank’s 2% inflation target and feel better about cutting rates.

Like Gold, the Silver price also had some highly volatile days last week based on the Federal Reserve interest rate announcement. Silver reached a low of $28.73 on Thursday before rallying back above $29 on Friday. As Gold stays above the $2,300 per ounce support level, Silver needs to move back above $30 to stay bullish in professional trader’s opinions.

Silver closed Friday at $29.41 per ounce, up $0.20 for the week. The Silver-to-Gold Ratio moved to 97.71-to 1 last week, an excellent time to own more Silver.

Although the Chinese halting their Gold purchases doesn’t directly affect the Silver price, the Federal Reserve not lowering the Fed Funds rate to stimulate the U.S. economy does. Physical demand for many of the popular Silver coins and bars has been moving lower, and I don’t expect to see a stronger demand until after the summer months.

Today: Silver tested its $29 per ounce key support level this morning and quickly saw some bargain buying. The buyers took the price above $29.20 in late European trading. Trading volume, was low and demand needs to pickup to move the price higher.

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