by Alasdair MacLeod
Gold and silver had a down week, correcting some of their overbought condition.
Gold fell from Monday’s peak of $1288 to a low point yesterday (Thursday) of $1245, and silver from $17.40 to $16.35. Both metals rallied into Thursday’s close, and in early European trade this morning (Friday) gold was $1254 and silver $16.51.
Having been massively overbought in the futures market, it is hardly surprising that a correction of some sort has occurred. The correction was given added impetus when the Fed’s FOMC minutes were released, which caught complacent markets on the hop. It was generally expected that there would be no rise in interest rates following the June meeting, but these minutes were more hawkish. So much so, that unless there is a definite turn for the worse in the economy, it appears that the Fed funds rate will be raised in June, by one quarter of one per cent.