“The Market Gage” features insights into the precious metals market from Roy Friedman. Roy has over 30 years of in-depth experience in all facets of precious metals.
Precious metals have not been able to extend the big rally that occurred earlier in the week as trading volume has 
contracted a bit over the second half of the week. Despite a crude oil market that continues to collapse, as witnessed by W.T.I. now trading at $58.50 per barrel, gold and silver have held up quite well. The U.S. stock market is again seeing great volatility which should benefit precious metals as nervous investors are likely to exit that market and allocate some of those funds to precious metals as they realign their portfolios before year end and look towards Q1 2015.
In the short term the falling oil market may weigh on precious metals with gold testing support at the 10-day average at $1,212.75 and the 50-day average at $1,203.50. On the upside, resistance stands at the 100-day average at $1,234.25. A break above this level could set the stage for a dramatic year-end rally with gold taking a run at $1,275.00 – $1,285.00. Following gold, silver could be vulnerable if it fails to hold $17.00, with the market falling to $16.68 – $16.63 where the 10- and 50-day averages currently reside. Things get very interesting for silver if we break above the 100-day average at $17.85.
Have a good weekend,
Roy
Source: Dillon Gage