Daily Market Report 5/22/13

GOLD

The Gold price took a roller-coaster ride today, first jumping to $1,413.30 per ounce when Bernanke told the Joint Economic Committee of Congress that an end to the current quantitative easing (QE) program could mean a “substantial risk of slowing or ending the economic recovery and causing inflation to fall further.” He said the labor market has improved but “remains weak overall.” Then Gold sold down to $1,368 when during the question and answer period, his remarks were construed to mean policymakers conceivably could begin withdrawing some of their monetary accommodation in the coming months.

I was disappointed that the Gold price did not stay above the important $1,400 per ounce level and went negative by the end of the trading session. Today’s trading tells me that Gold remains in a defensive position and needs to spend a little more time consolidating in the $1,350 - $1,380 per ounce price range before resuming its long term bull move.

At 11am PDT today, Gold is trading at $1,365 per ounce, down $12 per ounce on very heavy volume.

China demand drives Asian gold bar premiums to record highs

Reuter’s reports that premiums for Gold bars hit a record high in Asia today as lower spot prices lured more buyers, mainly in China, the world’s second biggest consumer of the precious metal, amid tight physical supplies. Premiums for Gold bars in Hong Kong touched a new all-time high of $6 an ounce over spot London prices, up from $5 last week. Singapore premiums rose to $5. Banks in China were quoting up to $7 in premiums, two traders in Singapore said. "China premiums remain high because of a shortage in supply of the physical metal," said a Hong Kong-based trader.

SILVER

Silver followed Gold’s volatility today, reaching $23.34 per ounce and selling down to $22.30. Physical demand for Silver investment products remains strong as the U.S. Mint reports 2013 year-to-date sales of 1 ounce .999 Silver Eagles has hit 20,872,500 coins. This is on pace to set an all-time record above 40 million ounces.

At 11am PDT today, Silver is down $0.08, trading at $22.44 per ounce on better than average volume.