Gold Hit a Five Year Low Yesterday

December Gold broke thru the well-supported $1,073 area yesterday, reaching a 5-year low. For those who are short the yellow metal, they all await the Wall Street trader’s next technical level of $1,050 to be tested.

On the other side of the ledger we all await the FOMC minutes to be released this afternoon to hear if they give any clues that would indicate that a rate hike in December is a done deal.

Silver finally catching the falling knife that Gold experienced of late, trading this morning down to $13.99 in the December contract, just above the next level of support at $ 13.95. Silver coin demand continues to moderately increase along with the premiums.

A lack of Chinese demand in the metals arena, along with the strong dollar, puts a lid on any Gold price appreciation for the short term.

For those who follow Copper, that base metal traded yesterday at a six and a half year low.

With the strength and momentum in the equities market, the average retail Precious Metal investor is nowhere to be found. One broker told me that it would be suicidal for him to recommend buying Gold over a good paying dividend stock. With the price of Gold continuing to fall, one broker told me, “the next time you hear from me probably will be by mail in a Christmas card.”

The only news that could turn this bullish sentiment away is an indication that a rate hike in December won’t happen. So in the absence of any unexpected news from the FED minutes today, we expect the trend to continue.

Have a wonderful Wednesday.

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.