All things considered, the performance in gold prices yesterday was pretty impressive as the market managed to spend almost the entire trade in positive territory, it maintained positive traction in the face of negative outside market influences like a stronger dollar and most importantly it held gains in the face of a noted downshift in geopolitical tensions.

However the market is showing some retrenchment this morning perhaps because some longs are banking profits rather than face the prospect of a steady Fed inspired volatility event. In other words some portion of the late May and June rally of $75 factored in a dovish Fed and the lack of distinct dialogue that sets the table for cuts later this year will obviously result in a setback in prices.

However, gold prices remained positive in the face of news yesterday that Russian gold production last month increased by 11.5% relative to year ago levels, and that shows the market isn't overly vulnerable to bearish internal fundamentals.

While the gold trade appeared to be skeptical of the sudden and significant improvement in US/Chinese trade relations trade headlines overnight generally remained positive and that justifies part of the setback to start today.

However, as we have already noted this week, a number of well-known financial market participants have come out bullish toward gold and the trade also sees upbeat news for gold from news of a possible takeover of Canadian miner Acacia by Barrick Gold as that suggests industry officials think gold assets are undervalued.

In the end the near term trend in gold is likely to be set this afternoon but pushed into the market we think the Fed will not fully live up to the hype calling for a series of rate cuts this year.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.