By Tim Iacono
Iacono Research / Seeking Alpha
Following a surprising two-week rally in the middle of the month, precious metals ended the last full week of June almost exactly where they began after the gold price rose to a nine week high and silver reached its highest level since mid-March. The silver surge has been particularly impressive and a new technical setup has developed for both metals after markets appear to have “digested” the big mid-month gains.
The threat of higher inflation combined with dovish comments by Fed Chief Janet Yellen as detailed here a week ago were countered in recent days by more hawkish outlooks from other central bank officials and geopolitical concerns have faded, at least for the time being. A weakening dollar continues to be positive for precious metals and more disappointing reports on the U.S. economy did little to halt that trend.
In China and India, seasonal factors played a key role in physical market demand reaching its lowest level of the year. There is disagreement about whether the unraveling of gold financing deals in China has had a positive or negative impact on the gold price and the story of Germany’s quest to repatriate a portion of its gold reserves held at the New York Fed took a surprising turn, one that will only add to the many gold conspiracy theories.