GoldCore Precious Metals Update
Gold: Gold’s correction has been quite sharp but given the extent of the rise since mid April (from $864/oz to over $980/oz or over 13% in just 6 weeks) it is not unexpected. A 50% retracement of sharp rallies is quite common and yesterday’s lows of $925/oz is very close to an exact 50% retracement.
While the dollar has rallied in recent days on soothing comments by the some of the US largest creditors (Chinese and Russian officials), concerns regarding the dollar and a possible downgrade of the US credit rating will likely see gold once again challenge strong resistance at $1,000/oz in the coming weeks.
In something of a "good cop, bad cop routine", the Russians and indeed the Chinese have been giving mixed messages regarding their confidence in the dollar. President Medvedev said last week that the world cannot rely on one reserve currency – in contrast to the more positive comments of his finance minister which were focused on yesterday.
Silver: $14.00 acted as very good support yesterday, continuing on from its losses of 3.8% the previous day. It has recovered nearly 1.5% again today and is currently trading at $14.27.
Platinum Group Metals: Platinum is currently trading at $1,223 in tight support/ resistance levels of $1,200/$1,300. The Lonmin mine news from yesterday and today’s news that EU 25 car registrations only fell by 4.4% in May compared to 11.9% in April helps maintain a bullish tinge to the group.