Feb 17, 2015

Silver & Gold Update February 17

By   Darren V Long   |   Tags:Bullion, Darren V Long, Gold, Gold Coins, Gold Maple Leaf, Hard Assets, Precious Metals, Royal Mint Coin, Silver, Silver Coins   |   Category: Blog

The price of silver has dropped slightly down so far in today’s trading, presenting buyer’s with a small dip opportunity for the second day in a row.  It would appear yet again that the precious metals complex is facing downward pressure as a strengthening US dollar offset gains from safe haven demand, stirred by yesterday’s cessation in negotiations between Greece and its creditors.

Silver is now down to $16.45, two percent below its 50-day simple moving average of $16.83. Yesterday the precious metal closed down slightly on the day amid a low volume session as trading in the US was limited due to the national Presidents’ Day holiday as well as Family Day activities here at home in Canada.

Precious metals had gained support from developments in Europe that triggered safe haven buying last week. However, yesterday, talks between the Eurogroup members and the delegation led by newly elected Greek finance minister Yanis Varoufakis broke down without an agreement over the country’s bailout programme.

The unexpectedly rapid fallout in talks has prompted concerns over Greece’s future in the Eurozone.  It is making it near impossible for the Greek people to pull themselves out of their economic doldrums whilst pleasing creditors at an appropriate pace suitable to stakeholders involved.  Most austerity measure are failing at this point and the long term success of the Eurozone may well hinge on these very negotiations.  As a result it is now wonder why we arrive at work this morning to find the price of both gold and silver lower as each of these metals represent safe haven alternatives to the US dollar and appear to have been hit hard by the bankers in an effort to dissuade investors form entering at this point.

The impasse over Greece/Eurozone ministers’ discussion on bailout terms will likely be a supportive story for precious metals such as gold and silver in the short run. Following the Eurogroup meeting, the bank increased its expectation of a ‘Grexit’ from the euro to 50 percent from 25 percent previously so volatility in the world markets should be expected and this does represent a good buying opportunity for both Gold and Silver.

The gold:silver ratio is sitting at approximately  at 71.21. For full bullion prices for delivery to your account or home please click here to launch Guildhall’s Bullion eStore

Darren V Long
Senior Analyst
Guildhall Wealth Management

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