The Market Gage – Stock Sell Off Boosts Precious Metals

“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.

 

Precious metals found a good wind in its sails yesterday as the U.S. stock market sold off sharply recording the largest daily loss in three months. As several companies have missed their earnings targets, the strengthening USD has many of these international companies lowering their guidance for 2015 which could add to equities being sold and money rotating back into precious metals.

Yesterday also brought us a continuation of mixed economic data in the U.S. as durable goods orders badly missed the consensus target while lower mortgage rates have given a boost to the housing industry. Central Banks continued adding to their gold reserves in December as IMF data showed several countries added to their reserves. Russia and the Netherlands were the biggest buyers adding 30.24 and 9.61 metric tonnes to their holdings, respectively. Perhaps most telling in this data was that the Netherlands Central Bank thought the timing was right to buy gold – its first purchase in 16 years. In advance of an FOMC statement later today, equities have rebounded a bit, crude oil is sharply lower and precious metals are mixed. While gold has failed to make another run at $1,300.00, physical demand has picked up sharply on the recent dips and silver continues to impress as it trades above $18.00.