The Market Gage – Precious Metals New Year’s Analysis

The holi day trading week began with a very quiet Asian session overnight as the lack of physical demand empowered the shorts and likely caused some of Friday’s buyers to lock in a profit. Interest rates continue to probe higher as the 10-year bond is now yielding 3.00 percent which is supporting the USD and pressuring precious metals. Gold and silver have already tested $1,200.00 and $19.50 this morning and bounced, but a break of these levels with light physical demand could see the markets vacuum down to $1,185.00 and $19.00. Rally attempts continue to be difficult to sustain as producer selling, ETF liquidations and short sellers lurk above.

While physical demand has been good through most of the year, 2013 has not been good for gold as the 12-year winning streak ended in a big way. The key event that powered gold higher was the weak global economy and the stimulus programs employed by the world’s central banks.

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