Gold and silver December and September future closed above the key short term technical resistance of $658.00 and $1174.0 and looks set for $700.00 and $1280 if they are able to close over these levels today. It is one of the reasons for we have been advocating a buy first, sell later strategy due to the medium to long term bullishness in gold and silver prices.The US dollar weakened despite stronger economic data and dollar supportive comments from new US Treasury Secretary Paulson.
Crude oil rose due to storm warning in the Gulf of Mexico. The third tropical storm of the Atlantic hurricane season bore down on the Caribbean's northern Leeward Islands yesterday and could become a hurricane headed for the Gulf of Mexico later this week, U.S. forecasters said. Storm warnings were posted for many of the small northeastern Caribbean islands and the U.S.territory of Puerto Rico as Tropical Storm Chris' maximum sustained winds strengthened to 60 miles per hour. Crude oil prices as well as gold and silver will remain firm due to hurricane season in the Gulf of Mexico as trader will not go short.
Temperatures heating up around the US and the possibility that a new national record will be set in July for the warmest month since 1895, energy usage is sure to be reaching extreme levels.This means that utility bills for many families across US will be painful for the month of July and possibly even August. Combining this with high gasoline prices and increasing mortgage payments, the growth prospects of the US economy as well as the US remains negative. There are positive news for gold and silver bulls.
Conflicts in Lebanon have yet to ease while Iran rejected the UN’s calls for an end to their nuclear development program by the end of the month.Without even attempting to try to delay international outrage, Iran has branded the UN Security Council’s resolution as worthless while a high level Iranian official said that “Iran will not take part in a game which it will lose. UN sanctions and a later a war with Iran seems imminent which could result in crude oil reaching our immediate price target of $84 and gold over $700.00.
Gold and silver will be firm but volatile. Reduction in Middle East tensions, lower crude oil prices and a stronger US dollar only risk for lower gold and silver prices.
GOLD
Gold targets $688.00 and $712.00 but needs to close over $658.50 to sustain the weekly bullish momentum. On the lower side $652.50 is the initial support with $642.00 and $637.10 as the key short term support levels.
SILVER
Silver targets $1236 and $1304 as long as it holds $1162 on closing basis. On the lower side $1135 and $1125 are the key short term support levels.
Happy Profitable Trading
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