Gold and silver prices continue to be range-bound, for gold around $1,300 an ounce and for silver between $19 and $20 an ounce, but with the recent break-out for another safe-haven in Treasuries last week, it’s possible the metals will soon break free of their recent trading ranges as well. Unfortunately for gold bulls, a move to the upside has been made more difficult by the U.S. dollar that is again strengthening, and this appears set to continue amid talk of monetary easing by the European Central Bank that could lead to a weaker euro.
The situation in the Ukraine is not improving, but gold traders seem to be getting bored with this story again despite escalating violence and there being no peaceful resolution in sight. Instead, traders pored over a bevy of U.S. economic data last week but, despite clear signs of accelerating inflation in the U.S., this generated little buying interest for gold and silver.
China gold demand has been steady, and U.S. hedge funds made few changes to their gold holdings in the first quarter. Investment banks remain mostly negative about the prospects for precious metals, though less negative than they’ve been over the last six months, as this market seems to be “stuck in neutral” heading into the traditionally slow summer months. The recent elections in India could liven things up if, as expected, the new government relaxes the draconian gold import curbs that have stifled demand there for more than a year.
Precious metals remain stuck in narrow ranges…