Precious Metals A Snippet From June 22, 2017 Pivotal Events

Precious Metals a snippet from June 22, 2017 Pivotal Events

Two weeks ago, we noted that gold’s rally was getting overbought as the DX was getting oversold.

Gold reached resistance at the 1298 level and has declined to 1241, where there is support at the 200-Day ma. It could trade in range into August when it could become vulnerable to a firming dollar. But, as noted last week, in a crisis the investment demand for gold will increase.

Since the weak rally to 18.54 in February, silver’s decline has remained below the declining 50-Day ma. Most of this was against a weakening dollar. Silver’s problem is that going into credit distress, the gold/silver ratio moves against silver. What’s more, the ratio is a form of a credit spread as following a financial mania the “flight” is to the most liquid items. These are mainly gold and T-bills in the senior currency, which is still the dollar.

As for investing in gold or silver stocks, conditions are still not “comforting”. After August, silver could take some remarkable declines relative to gold, which would indicate the arrival of a credit crisis.