Dollar Index drives Gold down

GOLD

As the U.S. Dollar Index stayed above the 96.50 level and started moving to 97, the price of Gold dropped to $1,160 per ounce, a 20-month low. Stop loss selling appeared to add support for the early selling. Heavy buying appeared at that level, taking the price back above the $1,180 level. Gold equity (miners) prices took a real beating yesterday on Gold’s initial drop. Today they have shown gains, a good indicator that the price has bottomed out. At 11am PDT today, Gold is trading at $1,178 per ounce, down $2 on excellent volume.

SILVER

Silver tested the recent low of $14.33 again this morning and held. Physical and future demand has picked up in the past two days. With the Silver/Gold ratio above 80 ounces to 1, we are seeing increasing demand. At 11am PDT today, Silver is trading at $14.70 per ounce, up $0.18 on excellent demand.