Calm after recent market volatility
After a tumultuous previous week highlighted by volatility and liquidation, the precious metals are finally settling down and trading in more of a typical holiday mode. News of note this week is fairly thin and many market participants are celebrating the holidays. Comex volume in gold this week is less than half of its average over the last month. Silver’s volume is about 1/3rd of its monthly average. While much of the market is on the sidelines, participants are still keenly aware that negotiations regarding the Fiscal Cliff are right around the corner. Developments regarding this highly contested topic should be closely monitored.
In the wake of dropping $60 in three days last week, gold has spent this week consolidating nicely around the 200 day moving average at $1,660.75. The yellow metal held at a long term trend line at $1,640 and, as such, was able to attract bids to rally from its lows. For now, support remains at this trend line (currently at $1,645) while gold needs a strong close above the 200 day moving average in order to look stronger from a technical perspective. Silver created a double bottom at $29.60 last week and will look to maintain its footing above $30 in these thin trading conditions.
Happy Holidays and talk to you all in the New Year!
