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Physical Demand Remains Anemic

Commentaries & Views

(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.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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