Daily Market Report 5/28/13

GOLD

Strong economic news indicators caused Gold to open lower on fears these indicators will result in a change in Federal Reserve stimulus policies. The increase in consumer confidence and record increases in the home price index caused the U.S. Stock Market to rally over 200 points, while driving Gold down to $1,373 per ounce on the opening. After Gold opened lower, it quickly rallied to surpassed the key $1,400 per ounce resistance level, but couldn’t hold.

At 11am PDT Today, Gold is down $5 per ounce, trading at $1,383 per ounce on excellent volume.

CENTRAL BANKS CONTINUE TO BUY GOLD IN APRIL

Russia, Turkey, Kazakhstan and Azerbaijan expanded their Gold reserves for a seventh straight month in April, buying bullion to diversify foreign exchange reserves due to concerns about the dollar and the euro.

Russia’s steady increase in its Gold reserves saw its holdings, the seventh-largest by country, climb another 8.4 metric tons to 990 tons, taking gains this year to 3.4% after expanding by 8.5% in 2012, International Monetary Fund data showed.

Kazakhstan’s reserves grew 2.6 tons to 125.5 tons, taking the increase to 8.9% this year after a 41% expansion in 2012, data on the website showed.

Turkey’s holdings rose 18.2 tons to 427.1 tons in April, increasing for a tenth month as it accepted Gold in its reserve requirements from commercial banks.

Belarus’s holdings expanded for a seventh month as did Azerbaijan’s.

Greece’s Gold holdings climbed for a fourth month, according to the IMF data. This could be a sign of rising economic nationalism in Greece, or that the Greek central bank realizes that if Greece leaves the euro and is forced back onto the drachma, Gold reserves will offer a modicum of protection. Only a modicum, because Greece’s Gold reserves remain miniscule, especially considering the scale of their debts.

SILVER

Today, Silver continued to stay in a very tight trading range between $22.16 on the low and $22.68 on the high. Silver needs direction from Gold. Until Gold breaks and stays above $1,400, or falls back below $1,350 per ounce, Silver is likely to stay in a tight trading range with light volume.

At 11am PDT today, Silver is trading at $22.31 per ounce, down $0.20 per ounce.