All it took on Friday, after Bernanke said no tapering in the foreseeable future on Wednesday, was St. Louis Fed president Bullard indicating a small taper may still be in play for this October. Traders that anticipated Bernanke’s wait and see approach, were quick to lock in their profits. The suggested $1,355 hard stop offered the protection in a very nervous market. These markets are reactionary which gives plenty of opportunity for squeezes, be they long or short. The markets, I believe will focus on the debt ceiling debates over the next two weeks and tapering angst will be put on the side burner. Within this context, I suspect the market will be reluctant to aggressively take a short stand and a more likely scenario will be support in the $1,322 range and if breached $1,307. Should the debt ceiling “debates” get overheated and create suspicion that an event à la 2011 is again possible, the market will need to take out $1,337 and $1,357 to renew the uptrend.
By Peter Hug
Global Trading Director
Kitco Metals Inc.