Gold Rallies On Indications Of A Contracting Economy

GOLD

A weak Chicago October Purchasing Management Index (PMI) dropped to 43.2, from 47.1 in September. Economist had been expecting an increase to 48.3. This is an important indicator which the Federal Reserve follows and confirmation that the economy is contracting. The Dow Jones quickly dropped over 200 points and Gold rallied $15 per ounce, moving back above the key $1,500 resistance level. At 11am PT today, Gold is trading at $1,512 per ounce, up $20 on good volume.

SILVER

Silver rallied with Gold, reaching a high of $18.13 per ounce before seeing some short-term profit taking. The profit taking took the price down to $18 and Silver found excellent support at that level. Staying above the key $18 level at the close of business tomorrow would be very health for the short-term direction of the Silver price. At 11am PT today, Silver is up $0.26 per ounce, trading at $18.05 on good volume.