Drop in precious metals is seen as a buying opportunity

Gold was hit hard during the Asian session overnight on chunky hedge fund selling.  On a February 2013 Comex sweep, an approximately 4,000 lot (400,000 toz) sell order caused gold to drop $12 during the Japanese trading session.  Gold is somewhat recovering from the liquidation pressure and has temporarily found support at $1,690.  Should gold close below both the 100 day moving average at $1,697.75 and the psychological level of $1,700, it would project down towards the 200 day moving average of $1,660.50.

Even though the precious metals are looking heavy, physical demand in the U.S. for coins is starting to pick up again.  The drop in price is part of the reason as value buyers look to take advantage of the move lower.  The other part of the equation is that sovereign mints such as the Royal Canadian Mint, China Great Wall, and the Perth Mint have begun selling 2013 dated coins.  While demand from these types of physical transactions generally does not move the market, it may help provide a short term floor.

The view here is that any drop in precious metals is seen as a buying oppurtunity for your long term holdings.