Daily Market Report 01/20/12

GOLD

Gold has been showing excellent support at $1,645 per ounce and resistance at $1,670, and most professional traders are buying on dips and selling into resistance, with very few wanting to be short. At 11am PDT, Gold is trading at $1,664.00 per ounce, up $7.20 per ounce on average weekend trading volume.

Today’s report from ICBC (Industrial & Commercial Bank of China) – the world’s largest bank by stock-market cap – said that 2.33 million Chinese citizens now buy Gold through its gold accumulation savings account. The banks accumulation program was launched in April 2010, and is currently holding 22 tonnes of gold bullion. A comparable program in Japan reached 0.7 million accounts at their peak, according to Bruce Ikemizu, manager of Standard Bank Tokyo.

"The Chinese really love gold," said ICBC’s deputy head of precious metals Shi Xudong to reporters today. "The fact that the government has started to clean up the gold market is favorable to our business," he added – pointing to this month’s ban on all but two officially recognized Shanghai Gold Futures exchanges.

SILVER

The breakout in Silver today indicates that we are going to see a settlement in the Greek refinancing crisis and additional quantitative easing from the ECB. Inflation here we come, silver has never looked better, the next resistance level is $35 and then $40 per ounce. At 11am spot silver is at $31.63, up $1.01 on very active trading, especially for a Friday. In next Monday’s Weekly Market Report I’ll be raising the diversification percentage for silver.