Daily Market Report 06/20/12

GOLD
Today’s Federal Reserve announcement of expanding Operation Twist by $267 billion through the end of 2012 continues the monetary stimulus that is very bullish for precious metals. Many analysts were expecting a QE3 announcement today therefore, the initial reaction on precious metals prices was lower. However, in the Federal Reserve’s statement that groundwork for a QE3 was established and should happen within the next couple months.

Gold dropped to $1,589 per ounce right after the Federal Reserve’s statement, but after reading the language in the statement, Gold has been rallying. Federal Chairman Ben Bernanke is holding a press conference at 11:15 PDT, and I’ll be looking for more hints of a possible QE3. Right now, at 11am PDT, Gold is trading at $1,614 per ounce, down $8.80 at this point in the day on heavy volume. The next resistance area for Gold is the 100-day moving average of $1,655.25.

SILVER
Silver followed Gold lower this morning, reaching $27.63 before turning a higher. Volume of trading is the highest in the past week, with the bias on the bullish side. At 11am PDT, Silver is now unchanged, trading at $28.45 per ounce.