Apparently gold is back in vogue and we suspect that is partially the result of an ever expanding list of geopolitical flashpoints. In addition to escalating US/Russian tensions (regarding nuclear testing activities & election tampering) the markets are also presented with fresh tensions in North America between the US and Mexico following the announcement of US tariffs on Mexican goods until Mexico moves to stem the flow migrants across the southern US border.
However, increased potential for impeachment of the US President combined with the Saudi Summit regarding Iranian terrorist activities earlier this week leaves a growing number of flashpoints in the marketplace into the last trading session of the week. Yet another angle emboldening the bull camp came from slack US data yesterday as that knocked the dollar back from its highs and gives fresh credence to the idea that the US Fed might actually be forced to cut interest rates later this year.
While an eight day high Thursday failed to breakout above a four month old downtrend channel resistance line, that resistance line was taken out this morning and therefore the bear camp has to be put back on its heels this morning. Seeing the psychological even number pivot point of $1,300 taken out early and given the prospect of anxiety from declining equities, one might see little in the way of resistance until the May highs up at $1,310.10!
While the silver market showed some recovery action yesterday, it is showing negative action in the early going today in a fashion that suggests it will continue to suffer because of deteriorating global economic conditions.
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