According to the ECB President, the central bank’s ability to control the eurozone crisis is limited. He confesses that no bond purchases or liquidity increase can be implemented as efficient tools at this point. At the same time, he says the ECB is ready to act if the situation keeps worsening. The EU and German authorities are discussing the possibility of helping Spanish banks even though Spain hasn’t officially asked for external financial support. Today, Spain is holding another bond auction. Investors are looking forward to its results. The next EU summit is scheduled for June 28-29th 2012.
In the meantime, a Fed Res member called for further economic stimulation. Ben Bernanke is going to give a speech today. Investors will be looking for hits.
Yesterday, gold traded within a price range, thus reacting to market uncertainty. First, the price grew after the ECB’s report. Later, the price went down after the US Beige Book report.
Silver was traded in a more aggressive bullish style on expectations of further economic stimulation in the USA and Europe. Some investors anticipate an increase in industrial demand for silver.
According to the Commodity trading department of , gold may test the resistance area around 1635, 1640. If an H1 price bar closes above 1636, it will probably trigger a rally up to 1650, 1675. Alternatively, a failure to consolidate above 1635 may well trigger the bearish scenario, thus giving way to 1600, 1585, 1575.
As for silver, the closest level of resistance is located at 29.50. A test of 29.50 is expected within the day. If it is successful, we may see the price testing 29.70-29.75. in order to resume the rally, the price will have to consolidate above 29.80. A failure to consolidate above 29.50 will give way to 29.0, 28.75, 28.50.
