Gold takes modest turn to the downside after yesterday’s advance

(USAGOLD – 7/1/2020) – Gold took a modest turn to the downside this morning after yesterday’s intraday advance that threatened at one point to break the $1790 mark. It is trading at $1782 in today’s early going – down $3.  Silver is up 7¢ at $18.35. The summer advance in both metals is most directly related to the economic ill-effects of the coronavirus and the stimulus/rescue programs launched by central banks and governments around the world to combat it. The second quarter was a good one for precious metals. Gold was up 9.5% and silver, playing catch-up, was up 25%.  The quarter ended with the gold-silver ratio closing from 113:1 to 98:1.

“With 10yr US real yields threatening to break lower,” says Credit Suisse in a report cited at FXStreet, “we look for gold to correspondingly break higher from its range above $1765 to confirm a resumption of its core bull trend with resistance seen at $1796/1803 next. … Big picture, we continue to eventually look for new highs above $1921, with resistance then seen next at $2000, then $2075/80.” Also posted at FXStreet, Citibank sees “a slow grind higher” for gold with $1900 the target in six to twelve months and then another leg higher in 2021 “towards $2000 per ounce.”

Chart[s] of the Day

gold seasonal chart 10 year average

line chart showing silver seasonality 10-year average

Charts courtesy of GoldChartsRUs.com

Chart note: With everything else that is going on in the economy and financial markets, It is easy to overlook the fact that we are heading into the summer doldrums for the precious metals – a time historically when demand sags, prices typically stay in a range, and dip-buyers take whatever opportunities might present themselves. Then again, as unpredictable as markets have become, anything could happen – including a summer rally in precious metals prices.

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