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The Market Gage December 17, 2014 – Russian Headlines Impact Precious Metals

“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 had a volatile trading week on good volume with most of the moves prompted by headlines that have to do with Russia. As sanctions continue to impact the Russian economy, President Putin has been backed into a corner and that could prove to have implications that lead to the threat of a military conflict. Earlier in the week, Putin was threatening to move nuclear weapons into the Ukraine which brought a very sharp but short lived rally to precious metals. Despite the Russian Central Bank raising interest rates to 17 percent in an effort to stem the collapse of the Ruble, the currency’s slide continues this morning. The result has been a precious metals market that is fueled by speculation that Russia’s central bank has either begun to sell or will sell in the near future some part of their gold reserves.

On top of this we have a crude oil market which has shown little ability to bounce off the recent lows as inventories continue to increase while demand is soft. With W.T.I. currently trading in the mid-$50.00s, many commentators are calling for a further drop of 10 percent, which could see the benchmark price trade below $50.00, and that would weigh heavily on gold and the rest of the precious metals. In the short term, look for gold to be the driving force where support can be expected in the mid-$1,180.00s while resistance should be encountered on either side of $1,215.00. Keep an eye out for the FOMC statement later today as it should add clarity to the path of interest rate hikes in 2015.

Source: Dillon Gage