UNITED STATES January 28 2015 4:35 PM
NEW YORK (Scrap Register): Gold has recovered promptly from below $1,200 an ounce after signs of capitulation and tax loss selling at the end of 2014 weighed on the price.
According to ETF Securities, a key potential determination for gold to sustain above $1,300 an ounce. may be a continued recovery in stock market volatility. The chart below depicts the spot price of gold overlaid with the 20-day average of the VIX.
The VIX has remained well below its historic mean the past few years, recovering recently, but if it declines back to 2013-2014 levels, the price of gold may suffer.
To the extent that stock market volatility continues to recover, gold and silver should be primary beneficiaries.