As go the USD and equities, the opposite go the precious metals. The Dow Jones held its 100 day moving average perfectly two days ago and it hasn’t looked back since. Positive US data yesterday has allowed the Dow to extend gains with it up over 315 points in today’s session thus far. Gold was essentially stopped in its tracks on Tuesday at $1,220 as sellers emerged around a seven point trendline stemming back from October of 2012. Gold has gradually traded lower over the past two days with investors reallocating funds into equities while simultaneously liquidating the yellow metal. Crude oil’s steady march lower and entrenchment below $50 is also not doing many favors for gold.
Coin and fabricated precious metals demand remains subdued in North American and Europe but Chinese demand has picked up in 2015. The Shanghai Gold Exchange arbitrage over London is trading at a $4 / toz premium. Gold still seems like it wants to test lower and support is coming in at $1,200 for the time being. Silver is rolling over along with gold but should find bids ahead of its 50 day moving average at $16.13.