Precious metals, led by gold and silver, continue to put up a good fight after the recent “snap back” rally. Despite a stronger USD, higher yield on the 10-year bond and a crude oil market that continues to weigh on precious metals, gold and silver continue to claw their way back to and above $1,200.00 and $16.50. Perhaps the best sign for the long term health of our market has been the incredible volume the physical, futures and ETF markets have been experiencing. Clearly there is broad based interest and participation in the bullion market.
The recent volatility in silver may have given long term investors the opportunity they were looking for to reenter the market as witnessed by the gold silver ratio which is back to trading at 73 this morning after trading above 80 earlier in the week. Gold was pressured yesterday by a comment from Federal Reserve Vice Chairman Fischer who spoke at a Wall Street Journal Conference. He said the FOMC is getting closer to removing the phrase “considerable time” to their statements when addressing how long interest rates will remain at these historically low levels. The comment saw the USD Index move to a four year high which pressured gold back into the low $1,190.00’s before buyers again materialized. The final FOMC meeting of the year is on December 16 – 17 which should keep all markets active through year end and sets the stage for an active and volatile beginning to 2015. In the short term gold support should be expected from the low $1,190.00’s through the low $1,180.00’s while resistance is likely to be encountered from the mid $1,220.00’s through upper $1,230.00’s. Silver support can be expected from the low $16.00’s through $15.75 while resistance can be expected from $16.75 through $17.10.
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