Daily Market Report 5/15/13

GOLD

This morning Gold fell for the fifth straight session, hitting a three-week low as the dollar strengthened to a six-week high versus the euro after weak euro zone economic growth data. Another negative for Gold was the nonpartisan Congressional Budget Office announcement late yesterday that the U.S. budget deficit will shrink by the end of fiscal 2013 to $642 billion, the smallest shortfall in five years.

Once Gold dropped below the psychologically important $1,400 per ounce support level, pre-placed computerized sell orders were triggered from professional technical chart traders for both Gold and Silver, driving the Gold price down to $1,389.00. If the Gold price doesn’t quickly rally back above the $1,400 level, we could see the April low level of $1,322 re-tested again.

As of 11am PDT today, Gold is trading at $1,398.20, down $28.80 per ounce on heavy volume.

U.S. Budget Deficit improved for 2013

The improvement in the U.S. budget deficit for fiscal year 2013 was a result of three major factors account for most of the long-term improvement: a better economy, a continued slowdown in the rate of medical inflation — which reduces the cost of Medicare and Medicaid — and higher taxes that Congress approved as part of the "fiscal cliff" deal in January, the budget office said. In addition, the automatic budget cuts that took effect this spring have reduced spending in the short term. The government also will benefit this year from dividend payments it is getting from the two giant housing finance agencies bailed out during the financial crisis.

SILVER

This morning Silver hit a low of $22.51 per ounce before a combination of profit taking and new buying hit the market.  At 11am PDT today, Silver is down $0.69, trading at $22.76 per ounce on heavy volume.

U.S. Mint sales of 1 ounce .999 Silver Eagles as of May 15^th hit an extraordinary 20,435,000 coins.  Physical demand for Silver investment products has been soaring during the recent decline in the market price.