Christmas Eve Rally

This has been a very interesting week in the precious metals markets. Monday and Tuesday we experienced the continued U.S Dollar strength as we watched the Gold (Comex) trade as low as$1075.20 (12/22) and looking as if it would continue to drop like a stone. The U.S Dollar has been stellar since the December 4th’s unemployment data and has also been fueled by the downgrading of Greece’s credit status which has certainly put pressure on the entire European Union. Greece’s deficit problems has forced investors to flock to the U.S Dollar as a safer haven. Since the U.S Dollar and the precious metals trade inversely (most of the time) the rush from investors to buy Dollars sent the Gold market south and sending the Gold “Bulls” running for cover.
This entire scenario changed Wednesday as reports out of Europe seem to signal the threat of a devastating financial breakdown in Greece had been reduced. This weakened the U.S Dollar versus the Euro and sent investors into the Gold and Silver markets as a safer haven and as a diversification away from the U.S Dollar. This trend continued on Thursday as the Comex Gold settled at $1104.80 or $29.60 higher than
Tuesday’s low.
India’s jewelers where buying Gold overnight … (BARGAIN HUNTING)… There “wedding Season “lasts through January…The international press has reported that China has a huge demand for retail Gold.
Good news on the home front today as once again fewer Americans than predicted filed for jobless benefits and orders for durable goods rose. This translates into confidence for the expansion of our economy. It certainly looks like commercial spending is also coming back!
Today’s Gold and Silver markets began reclaiming lost gains with the assistance of a stronger Crude oil market. Many international investors lack confidence in the U.S Dollar and have suggested this late U.S Dollar surge will not last.
Be very careful if you intend to trade the precious metals next week… It should be very “THIN” with “EXTREMELY LIGHT VOLUME” but as we all know the volatility will remain “HIGH”….. Always remember “THE MARKET IS ALWAYS RIGHT”
Mike Daly / Gold Specialist

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