Now that the US Presidential election is behind us, where do you buy silver and gold?
The US Presidential election is behind us… As expected by market participants, gold catapulted upwards with Obama’s victory against Mitt Romney. The psychological level of $1,700 provided no resistance whatsoever. It gave way immediately with gold screaming higher on traders’ expectations of the US maintaining its same course in regards to monetary policy and government spending.
The market’s favorable reaction to the election was short lived though. ECB President Draghi quelled the euphoric sentiment by commenting that the Eurozone crisis is finally beginning to damage Germany’s economy. The euro dropped 140 bps on the back of this and set the tone for the US as it entered its day. While the precious metals held up reasonably well, the broader commodities complex and US equities were crushed. Crude oil finished down 5% on the day while the Dow Jones closed down nearly 300 points and below the pivotal figure of 13,000. Besides being the first close below 13,000 since the beginning of August, it was also the first time the DJI has been under the 200 day moving average since June of this year. In other words, from a purely technical standpoint, it was not a fortuitous close for the Dow and it indicates further short term pressure.
