The euro and buying precious metals as an investment
In the past week, the precious metals have succumbed to liquidation after a very strong two month run. The precious metals downward action has been predominantly the result of hedge fund selling and ETF redemptions as institutional and retail investors take profits at these levels.
While the broader weekly move has been down, the precious metals have stemmed some of the selling pressure this morning and are catching bids on the back of a surging euro. There is conjecture that Spain will finally ask for a bailout package and the market is obviously reacting to this “news” positively. The euro has moved through 1.3 and is looking for a close above 1.305 which is a previous high from last week.
Since failing ahead of $1,800 earlier in the month, gold has trended lower in six of its last eight trading sessions. It found support yesterday at $1,730, a previous area of consolidation and this could prove to be a good buying level for short term range trading. Overhead, substantial resistance will still be found in the $1,790 to $1,800 range.
