Dillon Gage is proud to offer the following insights into the precious metals market from Roy Friedman. Roy has over 3o years of in-depth experience in all facets of precious metals. We will offer Roy’s comments several times each week.
Gold earned its “safe haven” status yesterday for the first time in recent memory. Equities and most commodities recorded significant losses on Tuesday while gold rallied and continued to build on Monday’s gains, which were the result of Friday’s poor U.S. employment data.
The major economic headline yesterday was the continuing problems within the Euro zone, with Spain and Italy the latest focus. With larger economies than Greece, each country’s woes have the ability to wreak greater havoc on the EU and global economies. Ten-year bond yields in both countries are approaching 7 percent and unemployment in Spain is at an incredible 30 percent (for comparison the ten-year bond yield in the U.S. is at 2 percent and unemployment stands at 8.2 percent). Spain’s major banks are now under the microscope as its economy continues to falter and the nation copes with striking unions and civil unrest. Yesterday’s reaction within the financial community was concern over the health of the European and global economy and the rippling affect that bank failures in Spain could cause.
The gold market was the safe haven of choice for global investors yesterday, as small and large investors in all facets our business were looking to buy. This morning finds equities recovering and poised to end a 5-day losing streak, while precious metals across the board are trading close to yesterday’s closing prices. With gold continuing its leadership role, nearby support stands at $1,655.00 through $1,650.00, while resistance lies at $1,675.00 and again at the 200-day moving average at $1,685.00.
Roy Friedman has a degree in economics and political science from the State University of New York at Binghamton. For more than 30 years, he has worked at all levels of he industry including as a trader for major Metals firms and international banks. For more information on Mr. Friedman, please click here.