Daily Market Report 7/10/12

GOLD

Gold broke above $1,600 earlier this morning and couldn’t hold it. After dropping back below the $1,600 per ounce level many of the short term traders shorted Gold, driving it down to $1,577 per ounce. At 11am PDT, Gold is at $1,581 per ounce, down $11 on above normal volume of trading.

SILVER

When Gold broke down below $1,600 per ounce, Silver dropped below $27 per ounce on the weaker than expected economic news from China. The short term picture for Silver isn’t looking that good right now; however value investors should scale into Silver in the $26.50/$26.75 range. At 11am PDT, Silver is down $0.65, trading at $26.90 on active volume.   

CHINESE NEWS THAT AFFECTS THE GOLD MARKET

Gold demand in China, the second-largest user after India last year, may expand 13 percent to 870 metric tons in 2012, the World Gold Council said, dropping a forecast for consumption to reach as much as 1,000 tons. 

China’s imports grew at a weaker than expected rate in June while exports also slowed, according to data out Tuesday, adding to growing evidence of a deepening slowdown and raising pressure on policy makers for more direct stimulus.

Tuesday’s Chinese data also showed the monthly trade surplus grew to $31.7 billion during June, a 70% increase over the $18.7 billion surplus recorded in May.