Precious Metals Quiet Overnight

We start off the week with a federal holiday honoring the accomplishments of Martin Luther King Jr.

Precious metals activity overnight relatively quiet on light trading volumes. The Dollar Index and the Euro steady, virtually unchanged in morning trading. Crude Oil overnight in the March contract hit a low of $29.35 with most all traders and trade houses looking for a $24 dollar level to be met near term.

Peoples Bank of China is instituting new rules regarding the money flows of the Yuan in and out of the country. The new rules were implemented to minimize short selling of the Yuan outside the country, stopping future devaluation by offshore banks and speculators.

Of the four precious metals only gold continues to see new buyer interest emerging in the ETF arena. During the last seven days, ETF speculators have increased their ETF holdings. I expect, we will continue to see increases if we break above the $1,100 dollar level, otherwise if we extend our seemingly locked-in trading range a redemption is expected. For the most part ETF investors are short term investors and are more inclined to get out if the market looks weak. A sell off in ETFs could move gold back to the lower end of the most recent trading range.

Silver, it seems, is looking to her big sister gold for guidance as she just drifts around the neighborhood with nothing to do. Silver’s cousins, Platinum and Palladium, are still in rehab with no signs of being released anytime soon.