Opinion with Peter Hug
Physical Demand Remains Anemic
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) -The metals have a slightly weaker tone coming in to the new week, primarily on the back of a modestly stronger dollar. The Brexit negotiations are beginning today, but it is unlikely, at this stage, that there will be any news bytes that will affect the metals. Equities look well bid for the open, which may also pressure the metals complex. Gold need to hold the $1,250-ish level, with a break likely to lead to a test of the $1,238 region. A close above the $1,255 level should give gold some respite from the recent selling. Physical demand remains anemic in North America. There remains a large physical overhang in the market, but we may be setting up for a 2015 style event, especially in silver. We are coming into the slow summer months and the producers ( mints/refiners) have small inventory positions on hand. A drop in prices may re-engage the retail buyer and the current physical supply would disappear quickly, pushing prices and premiums higher.