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07-Dec (USAGOLD) — Gold jumped to a new high for the week, buoyed by a softer dollar and perhaps a little bit of exhaustion on the part of the shorts in the paper market. That seems even more evident in silver, which surged to three-week highs above $17. Silver is up more than 2.5% so far today.
The Bank of Canada held steady on rates today, as was widely expected. While the BoC says the global economy has strengthened, they noted that there was still slack in the Canadian economy owing to persistent uncertainty, that is “undermining business confidence and dampening investment in Canada’s major trading partners.”
When the Fed meets next week, they are expected to nudge rates higher, despite those uncertainties. It would be the second rate hike in more than a decade. Prior to last December’s tightening, the last rate hike occurred in June 2006!
When the Fed hiked last December, it pretty much marked the low for gold. Perhaps the shorts are bailing today for fear that next week’s anticipated hike will correspond closely with another low.
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