Daily Market Report 10/3/16

GOLD

This morning Gold is trading in a very narrow $9 high/low price range. Gold has found excellent support around $1,310, but resistance at $1,319 per ounce. At 11am PDT today, Gold is down $3 per ounce, trading at $1,312 per ounce on average volume.

SILVER

Silver continues to trade above and below the important $19 per ounce support level. As we move out of the summer months, and at current price levels, I expect to see Silver demand pick up dramatically very soon. Silver hit a low of $18.74 in late trading as trading volume increased. At 11am PDT today, Silver is trading at $18.84 per ounce, down $0.34 per ounce on good volume.

Chinese Renminbi officially joins the Dollar as part of IMF SDR Currency Basket

Last Saturday, the International Monetary Fund (IMF) formally added the Chinese Renminbi to the basket of reserve currencies. This is a major economic move for China, as the Renminbi is now lumped in with the U.S. Dollar, British Pound, Japanese Yen, and European Euro as the world’s reserve currencies. As part of the IMF SDR Currency Basket, the Chinese are now hoping that the Renminbi will rival the Dollar as the world’s most popular de facto currency. As China continues to build its Gold reserves and improve the creditability of the Renminbi, the future value of the U.S. Dollar is in jeopardy. For years, I have talked about the Chinese currency replacing the U.S. Dollar as the reserve currency at the world’s central banks. If the Renminbi became the world’s reserve currency, there would be a dramatic increase in the price of Gold valued in Dollars.