Daily Market Report 6/28/13

GOLD

Yesterday, right after Gold briefly traded below $1,200 per ounce on the New Year CME Market, over 30,000 CME August 100 ounce Gold contracts quickly traded above $1,200 (A combination of professional short covering and new long buyers). In Asia this morning, Gold traded actively under and over $1,200 per ounce, reaching $1,180 per ounce at one point. Clearly the Gold market has been oversold and $1,200 per ounce for Gold is a crucial support level, which has been tested numerous times in the past 24 hours. The volume of trading on the world’s major commodity markets is extraordinary, particularly for a Friday.

At 11am PDT today, Gold is trading at $1,226, up $16 per ounce on heavy volume.

I want to point out that today’s trading is an excellent example of what technical analysts call an inter-day reversal with Gold making new lows ($1,180 per ounce) and closing up on the day near the highs. This is a very bullish sign if Gold trades higher on Monday. A few of the professional precious metal traders I have spoken with today are bullish on Gold, and think we have seen the lows for this year. Today is the end of the 2nd quarter of 2013, and I think it is important to understand Gold’s recent correction and future direction (I’ll cover this in my next Weekly Market Report – released on Monday.)

SILVER

During the dramatic drop in the Gold price this week, amazingly the value of Silver, Palladium and Platinum have held up substantially better. At current prices Silver has dropped 2.25% this week, while Gold shows a 5.2% correction for the week. Both Palladium and Platinum’s correction this week was under 3%.

At 11am PDT today, Silver is trading up $19.54, up $0.96 per ounce on excellent volume.If Silver can get above $20 per ounce next week, I believe a number of the hedge funds and analysts will start buying.

The U.S. Mint continues to be selling record numbers of 1 ounce .999 Silver Eagles. As of June 28th 2013 the U.S. Mint has sold 25,043.500 Eagles, compared to 17,392,000 for the same period in 2012. This is an increase of 7,651,500 (44%) in just six months, and on an all-time record pace. With the recent drop in Silver prices, demand and premiums have increased.