Gold Ratchets Higher
(Kitco News) - Gold continues to move higher as momentum has picked up against the falling dollar. Gold’s break up through $1,322 last week created the initial catalyst and Friday’s melt-up to the $1,338 level on the back of a falling dollar set up gold for a test of the 2017 high. Rising inflation in Europe is suggesting that the ECB will begin to tighten monetary policy more aggressively and valuations in the equity space in the EU are less expensive than in North America. Asset managers continue to allocate assets towards the EU which creates demand for the euro for settlements. The potential debt ceiling deadline and frustration with the President’s position on immigration suggests that bi-partisan efforts are being extremely strained. Gold support should hold the $1,338 line and a test of the $1,350 area is suggested. Silver has broken above the $17.22 level but continues to lag gold. Silver should be trading in the $17.55 area and will likely play catch-up should gold hold these levels.
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