Opinion with Peter Hug
Traders Buy Support Lines
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Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Metals find support at key levels. Both gold and silver found buying interest at their support levels of $1,255 and $16.55, respectively. The weaker tone to the dollar encouraged traders to buy the support lines for the metals but further gains should be capped, until gold breaks through the $1,265 area and silver re-establishes above $17. Physical supplies remain abundant in North America and investors who are looking to enter the physical market are seeing historically low premiums.
If the market begins to step higher, these physical supplies will disappear quickly and premiums will re-set considerably higher. The mints have scaled back production and a surge in demand, especially in silver, could produce premium prices similar to 2015, where physical shortages spiked premiums by 200%. Gold support remains at $1,245, with initial upside resistance at $1,258. Silver support at $16.55, with $17 the overhead line.