Daily Market Report 7/11/12

GOLD

Yesterday, the World Gold Council (WGC) lowered its 2012 Chinese Gold demand estimate to 870 tonnes (a 10% increase of 2011 levels) from 1,000 tonnes, claiming that the firmer dollar and stagnating Gold rally have dented the metal’s attractiveness. Another negative for Gold has been the decrease of Indian Gold buying due mainly to a weak rupee, and a record high Gold price. This lower demand in China and India is counterbalanced by relatively robust demand from other Far East nations. Another major difference in 2012 is that, unlike 2011, we have seen very little scrap Gold selling so far year-to-date. 

Gold has traded in a narrow $13 price range today awaiting the release of the minutes from the last FOMC meeting with regard to the future quantitative easing. At 11am PDT, Gold is trading at $1,570, down $11 per ounce on light volume.

GOLD EQUITIES CONTINUE TO UNDER-PREFORM BUILLION ITEMS

Goldcorp, one of the largest Gold miners, reported today that they expect full-year Gold production between 2.35 million ounces and 2.45 million ounces, down from its prior estimate of 2.6 million ounces. Goldcorp stock is down 10% today within a depressed Gold equity index.

SILVER

Today, HSBC Bank cut its outlook on Silver prices for this year, but said that it remains "moderately bullish" on the metal and expects prices to rally later in the year amid renewed investor demand. HSBC expects Silver to average $31 a troy ounce this year, down 9% from previous forecasts. "We believe that after declines in [the first half], the Silver market will rally and hit $33 per ounce by the end of the year," said HSBC analyst James Steel, adding that the "single bullish factor" for Silver in the year ahead will be renewed investor demand.

Silver is trying to stay above $27 per ounce on light volume. This morning Silver has traded in a $0.55 range. At 11am PDT, Silver is at $27.02, up $0.12 per ounce.