U.S. Labour Day sell off in precious metals
After a very impressive rally in the precious metals over the last week, all four are taking a breather today as they consolidate and become accustomed to these higher trading ranges. It would not be surprising to see a bit more of a sell off ahead of the Labour Day holiday in the US and then a push higher in the typically bullish month of September. In news this morning, US home prices bounced up in June for the second month in a row by 2.3%. This was the strongest back-to-back monthly advance in the more than decade long history of the price gauge. With this news, the USD was able to take back some gains against the euro after trending lower since mid-July.
Support for gold is coming in at the 200 day moving average of $1,640 while the market is likely to find offers waiting ahead of $1,700. The PGMs (platinum group metals including palladium) have been the real stealers of the show though recently and given their fundamental picture, might be the best buy here of the precious metals. Market participants are still closely watching developments in South Africa in relation to Lonmin and the broader mining situation. Despite initial reports of Lonmin furthering talks with their mine workers, attendance at the mines was lower again this morning. Support for platinum is at the 200 day moving average of $1,515.
