Gold And Silver: Daily Market Outlook. June 5th 2012

Today the G7 finance ministers and central bank governors are meeting to discuss the ways and means of resolving the eurozone crisis in advance of the forthcoming G20 summit scheduled for June 18-19^th 2012. Market participants are anticipating extra steps aimed at supporting European banks.

Yesterday’s US manufacturing orders report showed a decline while analysts had anticipated growth. Today’s US Services PMI is expected to come out without changes.

China’s Services PMI report (m/m) showed an increase yesterday. At the same time, the RBA cut the Australian Dollar interest rate by 3.5% in attempt to support the domestic economy, which is rather dependent on the Chinese economy.

Hong Kong ’s gold supply to mainland China increased up to nearly 102 tons in April 2012. The reverse supply exceeded 34 tons.

Analysts expect India’s central bank to cut interest rates by 75-10 basis points this month.

According to the Commodity trading Department of , today gold may continue its rally (started on Friday) up to 1645-1650, and maybe 1675. However, there is still a probability of testing 1613 within the day. If an H1 bar closes below 1612, it will give way to 1600, 1585, 1575.

As for silver, 28.35 is the closest level of resistance. A break and consolidation above 28.35 will resume the rally, which may hit 28.5, and even 28.75, 29.0, 29.25. A failure to consolidate above 28.55 will intensify the downtrend as the price may decline down to 28.25, 28.0.