Morning Gold/Silver Market Report Gold is finding moderate support this morning and climbed back above the $1,200 level, but has some ways to go to fully recover from this weeks pullback. A sharp range-down extension in gold was seen on Tuesday despite a slight breakdown in the Dollar charts. Apparently the benefits of a falling Dollar are lost on gold and silver bulls in the face of the Russian energy debacle. Gold did show some signs of outperforming the rest of the precious metals complex on Tuesday, which is surprising considering that the threat of a Russian implosion could have significant supply-side ramifications for the PGM sector. If anything, the PGM trade this week seems to be fearful that Russia might dump what supplies they have instead of fearing the inability to get any supply out in the face of a complete economic derailment. Traders need to be very careful now that February Gold is still trading close to $40 an ounce below the recent highs while March Silver is trading close to $1.40 an ounce below its recent highs. Granted gold was overextended with its last spec and fund long positioning, but the slide off the mid-December highs should have balanced the technical vulnerability of the gold market. However, the bear camp retains a fundamental edge from renewed fears of fresh Indian gold import restrictions, an infatuation with the downward bias in oil prices and lastly because of ideas that Russia might be forced to dump some of their gold and currency reserves. The bear camp probably felt like they also had the advantage of the upcoming Fed statement following last weeks Monthly Non-Farm Payroll results, but that impact has shifted this week to where a moderate portion of the trade is expecting the Fed to tread very lightly. In fact, it could be a neat trick for the Dollar to get beyond the Feds upcoming tightrope act without seeing further pressure, and the combination of an on-hold Fed and a weaker Dollar should put an end to the recent liquidation tilt. The worlds largest gold ETF saw their gold holdings fall by 1.8 tonnes on Tuesday for a second straight daily decline.
Posted on: Wed, 17 Dec 2014 13:12:25 +0000
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