Gold led the complex higher overnight when Asian traders and investors went bullish on gold as the Nikkei fell over 4 percent. A large gold purchase, rumored to be by a Chinese bank, took gold above $1,400.00, whereas buy stops on the electronic platforms took gold up to $1,410.00. The rest of the complex followed suit, but less impressively as witnessed by silver’s inability to trade above $23.00.
This morning’s U.S. economic data should be friendly to precious metals, as the gold market will now target breaking above the next resistance level of $1,420.00 – $1,425.00. First quarter GDP was revised down to 2.40 percent and initial jobless claims came in higher than expected. Both figures should put new wind in the sails of QE continuing at the current pace and temporarily subdue fears that the current bond buying program will be scaled back.
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References: Roy Friedman