Gold and silver are both trading near Friday’s highs, despite a hit taken soon after the COMEX open this morning. Precious metals had seen gains from Friday’s close in Asian and European trading overnight. U.S. equities are expected to consolidate today in thin trading after the S&P 500 closed at a five-year high Friday. A replay of the economic uncertainty over the fiscal is expected to play out over debt ceiling negotiations, and no major economic news expected today means many traders will be on the sidelines.
The dollar dropped along with precious metals in U.S. early morning trading after seeing strong gains overnight, but has recovered to near Friday’s U.S. close. The dollar is still riding on strength from hitting a 4 week high Friday. Oil is weaker today, attributed to profit taking after it hit a 2.5 month high last week.
Allen Sykora of Kitco News believes that continued central bank buying of physical gold in the low interest rate atmosphere world markets are experiencing will lend support to gold prices. With uncertainty over the quality of some sovereign debt, gold makes a good alternative to maintaining bank reserves for private and central banks.