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Gold Meanders Around Waiting For The Fed Next Week

Commentaries & Views

(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.

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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