Gold and Silver Current Thoughts 5-28-2015

From the Trading Desk

In the overnight session, the Shanghai stock exchange had its biggest drop in four months (6.5%) after it was disclosed that a Chinese sovereign fund reduced investments in the biggest state owned banks for the first time. This was the biggest equity sell off since China tightened up margin trading rules in mid-January. The bearish Asian equity tone carried over to the US session where the Dow and S&P finished mildly lower. The precious metals seemed to mostly ignore the fireworks in Asian equities and meandered through today’s session in uninspiring ranges though. Gold briefly tested support at $1,180 but bids lifted it to close around unchanged as the day wore on. Silver only had a 20 cent range and moved lower for the fourth day in a row. The path of least resistance is lower with initial support coming in at $16.50.

The US Mint announced today that it has lifted the imposed silver eagle allocation process for authorized distributors. This means that there is no longer a cap on the maximum amount of silver eagles a distributor can order. The physical markets have not been great recently and this US Mint announcement is a further reinforcement of lackluster demand.

I have been putting more emphasis on the dollar action recently and it hasn’t let us down from a micro point of view. After moving lower pre-market and into the open, gold managed a little move higher and the mining stocks rebounded a bit with a dollar decline below 97. Still keep an eye on this level for gold’s next move, but also keep in mind that from a micro point of view, the dollar and gold don’t always trade opposite each other.

New Article

I wrote an exclusive article on Seeking Alpha and you loyal readers will get first glimpse of it before I put it on the main blog. It will give you my thoughts on where we are now with the precious metals market.

Once Gold Breaks Below $1,158 Then What?

Freebie

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ETF Research Trading Service.