“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 rather “friendly” FOMC statement and subsequent press conference that Chair Yellen held Wednesday afternoon certainly gave no immediate signs that interest rates are moving higher in Q1 2015 and at this point, based on her comments about economic data, will determine the course of action I would expect rates to begin inching higher no sooner than June or July with no more than 2 rate hikes in total for the year. The equity market certainly liked what she had to say, as Wednesday’s rally was followed by a more impressive rally yesterday that saw the Dow Jones average gain over 400 points. Precious metals traders and investors were clearly less impressed and not convinced rate hikes were not right around the corner as the our market traded with good volatility following the announcement, but the net change in price was insignificant.
Despite gold and silver taking several runs higher this week, in overnight trading the rally attempts have not held up as $1,200.00 gold and $16.00 silver appear to be capping the market during U.S. trading hours. As this week heads for the finish line volume is light and all four precious metals are trading close to yesterday’s settlement prices. The next two weeks will bring us holiday shortened trading weeks with many market participants on holiday which often means we are in for a big move due to the lack of liquidity. With all eyes on the crude oil market, a test of the low $50.00s and beyond or a move back above $60.00 should bring fireworks to our market. Lastly, have a look at the gold – platinum spread which currently sees platinum down to a $1.00 premium to gold. Over the past few years platinum has gone to a discount a few times but more often than not this has been an opportunity to buy platinum and sell gold as platinum has regained a $50.00 plus premium rather quickly.
Have a good weekend,
Source: Dillon Gage