Volatility remains high in the precious metals markets again today. Further concerns about European finances and an increase in margin requirements on the futures exchanges pulled the rug from beneath the metals prices before they found a floor. After plunging to a low of $1,532/oz yesterday, gold rallied strongly fuelled by a number of issues.
Initially bargain hunters emerged as gold came close to its 200-day moving average. Physical demand was also very healthy as physical buyers took the opportunity presented by the lower prices. As the day progressed the stock markets began to rally sending the gold price back towards the highs of the day. Stock markets continued to rally throughout Asian trading hours and optimism that European Financial Stability Facility would be larger than originally thought, continues to aid the rally in gold this morning, trading to a high of $1,677/oz.
A consolidation before moving higher would now be healthy for the long term trend of gold.
Silver’s volatility has been even greater than that of gold in the previous 24 hours. It traded as low as $26/oz yesterday before finding a floor and rallying strongly. It is currently trading at $33.40/oz, some 28% above yesterday’s lows.
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