Daily outlook for precious metal markets

Quotes from Commerzbank Corporates & Markets:

-A broad-based sell-off took place on the precious metal markets yesterday. Gold shed 1.8% on a closing price basis and for a time was trading at a six-week low of just above $1,200 per troy ounce. The yellow precious metals fell in euro terms to €1,060 per troy ounce. Silver found itself under even greater pressure, plunging by 6% at its peak and ultimately closing trading at $16.5 per troy ounce.

-The silver price slide was accompanied by a significantly higher trading volume. In futures trading on the COMEX in New York, for example, more than twice as many contracts were traded yesterday than on average in the past six months. What is more, both silver and gold fell below the technically important 100-day moving average, which doubtless sparked technical follow-up selling.

-Platinum and palladium were also caught up in the downward pull, platinum dropping to below $1,170 per troy ounce, which corresponds to its lowest level in 5½ years. The price slide here went hand in hand with considerable ETF outflows - since the start of the year, 76,300 ounces of platinum have so far been withdrawn from the ETFs. Rumours emerged yesterday that the Greek government will apply today to have its financial aid extended by six months, though it is unclear whether it will accept the conditions attached to such a deal.

-The ECB will also be deciding today on whether to top up the emergency loans for Greek banks. Two Federal Reserve presidents have spoken out in favour of a sooner interest rate hike in the US, which caused yields on 10-year US Treasuries to surge and weighed on the gold price. This evening will see the Fed publish the minutes of its most recent meeting on 27/28 January.