January 26, 2015
“The Market Gage” features insights into the precious metals market from Roy Friedman. Roy has over 30 years of in-depth experience in all facets of precious metals.
The news of out of Greece was somewhat expected as the Syriza Party won a decisive victory although they fell two seats short of winning a majority. As they look to form alliances within the government to secure a majority block, the likelihood is that confrontations will arise sooner rather than later within the EU as Greece looks to address their debt load and renegotiate their bonds. The success of the Greek leaders to deal with their debt problems will also lay the foundation for other debt ridden EU members and could seriously threaten the Euro currency as we currently know it.
The initial reaction was a rally in the USD which significantly pressured our market, but prices have recovered and we are currently trading in the middle of the intra-day ranges across the board. The volatility to the downside saw gold test the 10-day moving average at $1,274.50 as it recorded a low of $1,275.60 before bouncing. Silver support at the 10-day average of $17.70 was not really challenged as the current low is $17.86. A break of the 10-day averages will likely unnerve recent buyers and their liquidations could see us testing $1,250.00 and $17.35 quickly. For those who follow Goldman Sachs’ market guidance, you know they have been very bearish on gold and precious metals. On Friday, they raised their forecast for gold’s average price in 2015 up to $1,262.00 from $1,200.00 citing weaker than expected economic data which supports the view that interest rate hikes, if they happen at all this year, will not have a negative impact on gold’s performance.