PRECIOUS METALS RECAP 1/20/2012

February Gold closed up 12.5 at 1667. This was 21.8 up from the low and 0.2 off the high.

March Silver finished up 1.166 at 31.675, 0.045 off the high and 1.275 up from the low.

After a weak start February gold managed to throw off the selling bias and in turn clawed back into positive ground well ahead of mid session. Some gold bulls were a little discouraged by the existing home sales figures, but it seemed as if hope for something favorable from Greece was trumping at least a portion of the bear case that seemed to be in control early in the Friday action. With February gold to this week's highs, sitting as much as $157 an ounce off the December lows, it isn't surprising to see press outlets carrying predictions of a near term corrective setback in gold prices. At least in the short term the gold market looks to be a physical commodity market that is mostly locked onto the track of macro economic conditions.

In retrospect, the silver market seemed to outperform the gold market today as silver actually managed a fresh upside breakout well ahead of mid session before gold managed to regain its footing. With March silver forging a very impressive range up move today it seemed as silver saw an influx of fresh buying interest or perhaps a measure of short covering buying. It did seem as if silver was garnering some lift from positive action in sectors of the US equity market as silver is also tracking tightly with macro economic sentiment. With the sharp rally today March silver reached up to the highest level since December 13th.