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Several economic reports out this week and the FED interest rate decision.
Yesterday, the Federal Reserve Open Market Committee (FOMC) left their benchmark interest rate unchanged from the last meeting. Their announcement indicated that there may be only one interest rate cut this year instead of previously saying two or three. This weighed on the price of gold and silver and prices reversed intraday from before the announcement.
Consumer prices for May were released yesterday and showed a moderation in inflation which increased metals prices in the morning before the FED interest rate decision. This morning the Producer Price Index (PPI) for May was released and also showed some moderation in inflation. Weekly jobless claims increased moderately.
Moderating inflation is usually good for metals as the carrying cost is reduced. I believe we are at an inflection point in the economy and as usual, the FED is behind the curve. My feeling is that economic activity is moderating.
Gold is down $70 an ounce or 3% since last Friday and Silver is down $2.24 an ounce or 7.2% since last Friday. Both are near price support levels now. Technical selling, in my opinion, is the reason for the gold and silver price drop. The gold/silver ratio has climbed back to 79 and when it reaches above 80 it is historically a buying opportunity. I continue to believe that gold and silver are in an overall uptrend and to buy on price dips.
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