Despite the Dow being down nearly 300 points at the time of writing, gold is still struggling to break through the significant resistance level of its 200 day moving average at $1,131.  This technical barrier has capped the market the last two days and gold has not been above it since October of last year.  Besides the 200 day moving average, the $1,131 area is also the fifth point of trendline resistance dating back to early December.  Traders on the short side of the yellow metal are protecting this level but will be forced to cover positions should it give way.  Gold certainly has the potential to run up if it does.

Investors finally warming up to gold again is best exemplified by the SPDR gold ETF which has added nearly 400,000 ounces in holdings over the past two days.  The US Mint also sold 124,000 ounces of American Eagle gold bullion coins in January, up 50% from a year ago.  Silver ETFs are not experiencing the same inflows as gold ETFs right now though.  Silver ETFs continue to shed ounces with overall holdings sitting at lows not seen since the end of 2012.  In the fabricated world, silver is much more readily available than it was just a few months ago and premiums on products are falling.  Silver will need to break out of its current range in order to attract physical investors.