Roy’s Commentary 5/4/16

Despite the continued weakness of the USD, falling bond yields and a weak stock market, the rally in precious metals has stalled as short term speculators have opted for locking in profits on recent purchases.  In addition, there has been talk of producer selling this week as hedging may have been increased with gold at a 15 month high.  While gold was not able to hold above $1,300.00, it has fared better than silver in recent days as witnessed by the gold silver ratio which has moved back up towards 74.00. Physical demand from our corner of the market has slowed a bit with the higher price points. Demand from China has been weak but the demand for gold ETF’s has picked up sharply and certainly adds to the bullish sentiment gold currently enjoys as our market is receiving much more press coverage than it has in many months. Technically speaking, gold has already breached my first support level today in the mid $1,280.00’s but better support should be found in the mid to low $1,260.00’s.  On the upside, momentum traders are likely to jump on the bandwagon if gold breaks above $1,310.00 with my target being $1,340.00 before another round of profit taking sets in.