Opinion with Peter Hug
Gold Meanders Around Waiting For The Fed Next Week
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold prices continue to meander in a tight range, with any significant break-out likely to await the Fed meeting next week. Yesterday’s comment from a member of the ECB that the conclusion of the QE program may be plausible by year-end provided some lift to the euro and modest buying in gold. It is unlikely gold will break through the recent $1,287 - $1,307 range until the Fed decision is announced. Silver has been quietly strengthening relative gold, with the ratio now approaching 78:1, from the 82:3 level seen early last week. We continue to favor silver against gold and trading the ratio appears a less risky approach than an outright naked silver long. The charts on silver suggest good support at $16.40 and a break above $16.67, on a close basis, suggests a retest of the $17 handle. Gold may weaken into the meeting but we believe the rate increase for June is a done deal. The announcement may still cause some knee-jerk selling, but may prove a good entry point.