Daily Market Report 5/21/13

GOLD

Yesterday Moody’s Investor Service reported in a news wire around noon ET that U.S. policymakers must do something about the government debt to avoid a U.S. debt rating downgrade this year. This was one of the contributing factors to yesterday’s Gold rally to $1,385 per ounce, after hitting a low of $1,336 per ounce in Asia earlier. Yesterday we saw an inner-day reversal which is a very bullish technical indicator that occurs during a downtrend when Gold opens below the previous day’s close, making a fresh low, and then closing higher than the previous day’s high.

This morning Gold briefly broke above the important resistance $1,400 per ounce level and was quickly sold off, hitting a low of $1,359. $1,400 per ounce is a key level for Gold to surpass to regain its 12-year bullish sentiment. Gold rallied off today’s low on a statement by St. Louis Federal Reserve President James Bullard, who said that the Fed should continue its present bond-buying QE program.

While physical demand for Gold from investors and central banks remains very strong, we continue to see a selloff in paper Gold holdings (ETF’s) which has had a negative effect on the Gold price.

At 11am PDT Gold is trading at $1,377 per ounce, down $8 per ounce on active trading.

SILVER

Silver briefly broke above the $23.00 per ounce level in yesterday’s rally and couldn’t hold it. This morning Silver reached a high of $22.94 per ounce, before sizeable selling in the market drove the price down to $22.07. At 11am PDT today, Silver is down $0.15 per ounce, trading at $22.52 per ounce on average volume.