Gold prices are currently holding slight gains as the market continues to consolidate following recent upside. This has been a relatively quiet week for markets in general without a whole lot of action. Perhaps the summer doldrums are here already.
The situation in Iraq, while continuing and perhaps getting worse, was a bit quieter this week. It is likely only a matter of time before the civil war is again dominating headlines, and market action for that matter. Some markets are paying attention, however. Crude oil prices appear to be headed higher from current levels, and should the situation in Iraq deteriorate quickly the possibility of a large spike in crude oil cannot be ruled out. Bonds and T-notes have also broken back out to the upside which could possibly signal increasing economic worries or increasing worries over the current geopolitical landscape. Interestingly, however, stocks just seem to continue to shrug off any potential negatives. The SP500 seems determined to print 2000, and the market is not very off at this point.
Has the dollar index topped? Who knows. The index has, however, been trending lower since reaching the $81.17 level earlier this month. The $80 to $80.20 level appears to be a key support zone for the dollar index. A breach back below this level may potentially signal a green light to additional gold and silver buyers to get into the market.
The Fed’s most recent comments may possibly be considered bullish for gold and silver as Fed Chairwoman Janet Yellen reiterated that the economy continues to require the assistance of the central bank and that low rates may continue to be warranted for some time. These recent comments could, in turn, be adding some pressure to the greenback.
The gold market is consolidating just below the April highs in the $1331 area. After the large up day last week, the market has essentially just traded sideways this week. In fact, the gold market has only seen a trading range of approximately $20. At this point, it seems that the gold bulls may be awaiting fresh news in order to try and punch through the April high resistance. Should the gold bulls be bale to take this level out, gold prices could potentially gravitate to the $1354 area rapidly. A breach above this level would likely see gold targeting the $1400 level. Near term support in gold may be seen at the $1300 level and then again in the $1280 area.
