DMR–Gold advances in minor rally, finds support near $1300
DAILY MARKET REPORT
Gold is advancing in a minor rally this morning after trading perilously close to the $1300 mark overnight. It is now priced at $1310.50 and up $4 on the day. Silver is up 5¢ at $15.70. Today’s pricing action provides the first inkling of price support at the $1300 price level. Gold hit bottom in Asian trading at $1302. Support came in during the London trading session and carried over to the New York open. Stocks in Europe, at the same time, took a hit after European Council president Donald Tusk proclaimed that there was “a special place in hell” waiting for those who pushed UK’s leave campaign. In the United States, the markets are still attempting to digest a confluence of new inputs – the Fed’s dovish tilt, a subsequent White House dinner between the president and chairman Powell, and a promise-laden State of the Union speech that if implemented would greatly boost spending for a government already running $1 trillion in the red annually.
Quote of the Day
“I grew up in a purely urban family. We had no relatives in the country. I’m born in 1944. When I was a baby, my mother could only buy food because she still had some gold coins. Without gold I would have starved. She always told me that. Therefore, this generation already has a certain gold affinity. In extreme times of crisis, this is one of the few things left to be accepted. Gold was the only thing left to the people of the city at that time. Before the silver cutlery was also traded at the farmer.” – Ewald Nowotny, European Central Bank governor
Chart of the Day
Chart note: This chart shows the price of gold in China’s yuan. We hear a great deal about the Chinese people’s attachment to gold and the vast amounts it imports. What we rarely hear about is how that attachment is working out for the people who own it. Since last August, it has worked out very well. Gold is up over 9% in yuan terms.
Additional note: We would like to thank Nick Laird, proprietor of the Gold ChartsRUs website, for his kind permission to feature the series of charts we are posting this week under the Chart of the Day section in our Daily Market Report.