Gold traded below the $1,305 price five times in the past two weeks, testing the important $1,300 per ounce resistance level. Now, Gold has firmed up that support and is finally moving up to the $1,320 area. Last Thursday, the U.S. Dollar and interest rates started weakening and Gold reached a high of $1,323. Gold closed on Friday at $1,319 per ounce, up $6 for the week.

Now the Gold price should work its way back upwards to the $1,350 level. Barring any unexpected negative news, we could see Gold firmly move above $1,320 by month end. Additionally, based upon Gold’s trading price in April, I expect to see many central banks report heavy buying. As many of the world’s largest central banks continue to dump dollars and add Gold to their nation’s reserves, this adds a major bullish fundamental for Gold ownership.

After our President made the decision to abandon the Iranian Nuclear agreement, and concerns about an escalation of tensions in the Middle East increased, we saw a spike in demand for physical Gold investment products in the entire middle eastern area. Nobody knows what is going to happen between Iran and the U.S. within the coming months, but residents of the Middle Eastern countries want to have Gold.

Today: Gold is trading in a very narrow $5 high/low trading range, from $1,318 to $1,323 per ounce. I believe Gold is in a base building period, just ahead of a major move higher.

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SILVER

Over the past two weeks, while Gold was building a base above the important $1,300 level, the Silver price was performing better. After bottoming out at $16.07 on May 1, Silver showed strong demand and quickly moved back to the $16.50 level. For the past eight trading days, Silver has traded above and below the important $16.50 level. Last Friday, Silver closed the week at $16.68, up $0.26 per ounce.

The Silver/Gold ratio moved lower last week to 78.84-to-1 on Friday.

Today: Silver tested the $16.50 support level this morning and held, reaching $16.55 per ounce before sizeable buying appeared. Right now, Silver appears to be staying in the $16.50 to $16.80 range, while also building a base for the next move to the $17 resistance level.

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Recommended Investment Commitment and Diversification:

Precious Metal commitment: Minimum of 40% of investment capital

Diversification: Gold 55%, Silver 35%, Platinum & Palladium 10%

Diversification includes 50% in long term investment quality rare coins and 50% short term bullion products.

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Categories: Weekly Market Report