What goes up, must come down?
Yesterday proved to be quite the knee-jerk day for the precious metals. They were trending down into the US session until 8:30 AM EST when US Advance GDP q/q figures were released. Economists were estimating a 1.1% increase but the actual number came in at -.1%. The lower GDP was predominantly due to the largest decline in US defense spending in forty years. Regardless, gold and silver immediately shot up and option volatility caught bids as well. Later in the session the markets were further rattled by the FOMC statement. While the FOMC didn’t reveal any ground-breaking news, gold popped up to resistance at the 50 day moving average before selling off. Silver saw an even more violent move up and then traded choppily down until it ultimately ended the electronic trading session straddling $32. All four precious metals are lower into today with a lack of physical buying coming out of Asia and a waning euro and crude price. Gold has temporarily found bids around $1,660 and more significant support is below at $1,640. Silver has rebounded nicely off its low today at the 21 day moving average of $31.16. Palladium continues to be the star as of late but is in the midst of its second down day and may encounter follow through selling pressure.
