Daily Market Report 02/26/14

GOLD

After reaching a high of $1,345 per ounce this morning, Gold finally showed some short term profit taking by selling off $18 from yesterday’s close. I believe it would be healthy of Gold to stay in a $1,320 to $1,350 per ounce trading range for a couple weeks. It would allow Gold to consolidate its recent move higher and build a base for a breakout above $1,350, while letting new long term buyers to enter the market. $1,350 per ounce is an important resistance level, and Gold may need to make two or three attempts to break above before it is successful. At 11am PDT today, Gold is trading at $1,330 per ounce, down $12 per ounce on excellent volume.

Gold Fundamentals remain healthy with today’s news

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.26 percent to 803.70 tonnes on Tuesday from 801.61 tonnes on Monday. Hong Kong’s net Gold exports to China for January were 89.745 tonnes, which continues to show heavy domestic demand for physical Gold investment products. U.S. home price gains slowed in December, according to a closely watched housing survey on Tuesday that underscored a loss of momentum in the housing recovery, while consumer confidence drifted lower this month.

SILVER

Silver really got beat up today, opening above the $22 per ounce resistance level and then testing the $21 per ounce support level. Like Gold, I believe Silver could use some consolidation in the current price range. At 11am PDT today, Silver is down $0.57 per ounce, trading at $21.42 on better than average volume.