Holiday Overview

With precious metals markets closed in New York today in honor of Martin Luther King, Jr., movement in gold was limited.

In overseas markets, gold was down $3.10, a number that would have been larger if not for some U.S. dollar weakness.

The big news items that we should be keeping our eye on are two. The first is the slump in China’s housing market, which has in turn led to a devaluation movement in Hong Kong and Shanghai stocks. We have often been skeptical of “official” Chinese growth numbers but now, as housing experiences a fairly large bust, the real numbers can’t help but come out into the light of day.

The second item to watch is how the world markets react to the European Central Banks announcement concerning stimulus actions.

We’re predicting increased volatility. In fact, the recent volatility we’ve seen, indeed may be related to the potential EU moves. Normally, factors become “baked in” to markets. Volatility, because of its very nature, is hard to describe or foretell how much or how little of it there will be. It will be an important factor and e will keep a close eye on volatility. Of course, usually volatility is good for gold. Silver gets a slightly positive boost from it, although silver is trickier, given its role as an industrial as ell as speculative metal

Wishing you as always, good trading,