With the US out yesterday for Martin Luther King, Jr. Day, the markets were quiet and gold took a brief pause from its recent rally. That rally has resumed in full force today though and the yellow metal is pressing against $1,300 for the first time since August of 2014. Gold is still feeling the effects of last week’s news of the Swiss National Bank ending the CHF’s cap against the euro and the central bank deepening negative interest rates. Gold was given further legs overnight with the International Monetary Fund cutting forecasts for global growth. In the European sphere, there is also speculation that a Greek election this weekend may lead to the country’s exit from the currency bloc. The combination of all these events has led to gold regaining its safe haven status. Gold ETF demand last week surged by over 700,000 ounces which was the largest increase since October of 2012.
Like gold, silver has made impressive ground in 2015 and is up nearly 15% on the year so far. It had a strong close on Friday by breaking through a long term down trendline and has formed a double top yesterday and today at $18. Gold breaking above $1,300 decisively will translate to silver moving above $18. It would then project to its 200 day moving average at $18.41.