A strong rally by the end of the last week and persistent concerns about the Eurozone sovereign debt issues are expected to maintain gold prices supported into next week, providing opportunities for valuations to test brand new highs. Silver continues to be volatile and traders may remain on the sidelines.
Gold for August delivery, the most-active contract, advanced $13.60, or 0.9%, to $1,537.30 an ounce on the Comex division of the New York Mercantile Exchange. For the complete week, gold gained 1.8%.
July silver rose 53 cents, or 1.4%, to $37.86 an ounce, gaining 7.9% this week.
The market’s price observed a moderate upslope during the week, which is also a positive indication for those who see further gains in a few days.
The financial debt crisis in the southern-tier European nations remains a significant element for the markets. Greece reaches the forefront of the most current problems as worries flared it would not receive its subsequent batch of payments coming from the International Monetary Fund and also the European Union. There are also several thoughts that China’s attempts to slow it’s economy are beginning to take hold. As soon as concerns over the Eurozone have risen, that has at times backed the U.S. buck, which at times can place pressure on gold since it is dollar-denominated.
Silver continues to see large trading spans after the sharp drop through near $50 set in April. Many investors now have no position within silver because it continues to be so volatile. The marketplace is still very uneven and that’s most likely keeping traders to the side lines.
Silver will have a difficult time building upon gains when it returns to the $40 level. Selling generally appears at the $38.50 to $39 range, with purchasing support around $34. Silver is actually caught in a soft place between industrial demands as opposed to precious metal demand. With current economic stories showing slowness in the manufacturing sector along with a dismal awaiting home sales report from April, which came out Friday, the industrial element of silver could keep it held back. For that reason, the gold-silver ratio may expand out once again in gold’s favor. This could cause gold to bust out of $2000 and silver to hit $50. I believe that now is a great time to buy silver and buy gold while prices are relatively inexpensive.