Gold & Silver Daily Market Recap: September 16, 2013

It has been a very eventful few weeks for the precious metals markets. We have seen spot gold and silver rally to multi month highs of $1434 and $25.10 respectively. The main drivers for these rallies was the ongoing strife in Syria, which has since subsided . The market has also been fixated one "tapering", will he or won't he. Since Federal Reserve chairman Ben Bernanke’s initial comments on tapering back in June, the market has been heavily focused on one question: when will the unwinding of QE3 start?

The market is decidedly weaker today after a overnight run up to $1336. News that Lawrence Summers asked to have his name removed from the race to replace Federal Reserve Chairman Ben Bernanke was a bullish signal for equities. Summers has been the most vocal about the idea of reducing the scale of quantitative easing, and his withdrawal now leaves his main competitor, Janet Yellen, as the clear front-runner to assume the office of Fed Chairman. The yellow metal has dealt to a low of $1307.70

The Federal open market committee's two day meeting begins tomorrow culminating in a much-awaited press conference. Expect the weakness to persist right up until Wednesday when Bernanke speaks. The tapering f  quantitative easing measures was expected to be a cut of around $10 billion to its bond purchases from the current monthly rate of $85 billion. The 10 billion cut is broadly factored into the price already. A cut of more would send prices lower to target support at $1270. With that being said we could see a significant recover in the prices once all the dust has settled. The market has seen an uptick in physical demand out of Asia as the prices drift lower. A break of $1300 would almost certain spur some buying.

Spot silver has enjoyed a fantastic 4 weeks. The grey metal saw a jump to $25.10 before profit taking kicked in. The metal saw some safe haven buying during the Syria crisis, now that the crisis has subsided we have seen the metal retrace to support.  The outlook for the dual role metal remains bright as the gold silver ratio retraces lower. The ratio has traded in a tight range of 61.35 to 58.24. Expect a break out of either side to yield the direction.