Daily Market Report 7/22/13

GOLD

Gold is off and running today, breaking the $1,300 per ounce resistance level in Asia early this morning which caused many traders to cover their short positions. Short covering and fresh long purchases have driven Gold to a high of $1,339 per ounce on heavy volume.

A number of major factors are responsible for driving Gold higher today. Hedge funds are increasing their Gold and Silver holdings after last week when Fed chairman Ben Bernanke dampened speculation of a reduction in stimulus measures, plus insatiable physical demand in Asia.

Fresh Gold demand is supported by the insatiable physical demand from Asia

Recently Japan’s biggest Gold retailer said that demand in the June quarter was triple that of the preceding three months, while imports by India have now surpassed 900 metric tonnes in 2013 - which is up from 860 tonnes in 2012. China’s demand for Gold remains very strong, with the country set to pass India as the largest bullion consumer - potentially before the end of this year.

At 11am PDT today, Gold is trading at $1,335 per ounce, up $41 on excellent volume.

SILVER

Finally, Silver is performing well today. With Gold’s major breakout Silver has followed with a nice increase on respectable volume. Silver has traded as high as $20.52 per ounce today, the highest price since June 20, 2013. If it can stay above $20 by Wednesday’s close, it would be an excellent sign that the worst is over and that the metal has turned bullish in the eyes of professional traders.

At 11am PDT today, Silver is up $0.94 per ounce, trading at $20.46 per ounce on good volume.