Harvey expects gold to go higher long term as paper assets continue to struggle, aside from "certain currencies like the Swiss Franc, what else is there to actually invest in?" Violence in Greece has also underscored gold and silver's appeal as safe haven metals as it did when civil war erupted throughout the Middle East and North Africa region.
Traders might agree. In the latest commitment of traders report ending June 21st, speculative long gold positions increased by more than 14,000 contracts where short positions grew by only 3,000. Silver actually saw short positions fall by 1,500 contracts whereas long positions increased by 1,193.
Gold and silver are both above their key support levels of $1,500 and $33 respectively, but gold must overcome $1,520 before confirming another rally and silver needs to move past $38. George Gero, senior vice president at RBC Capital Markets, says that gold's strength Wednesday was also in part due to technical trading, there were "buyers executing orders to re-purchase previously sold contracts." Gero also speculates that traders don't want to be short headed into the long holiday weekend, that is they don't want to be caught betting against gold.
The biggest short term indicator will be the U.S. dollar as the metals and the dollar tend to move inversely to each other. Some experts are attributing recent euro strength not to confidence in the EU's ability to fix its fiscal problems but rather the U.S.' inability to fix its own. The U.S. has a month to agree to raise its debt ceiling until the government risks defaulting on its debt.
Gold mining stocks
(KGC - Get Report)
was adding 2.70% to $15.57 while
(AUY - Get Report)
was up 3.20% at $11.68. Other gold stocks,
(AEM - Get Report)
(EGO - Get Report)
were trading at $63.36 and $14.82, respectively.
Written by Alix Steel in
>To contact the writer of this article, click here:
>To follow the writer on Twitter, go to