Daily Market Report 7/23/13

GOLD

Gold was up $43 per ounce yesterday, the highest increase in over a year. Demand was very strong and the rally happened in the face of higher U.S. Dollars and lower energy prices.

Based on extraordinary physical demand numbers coming from Asia, Gold moved past the technical resistance threshold of $1,300 an ounce. Many speculators, fearing a reversal of the recent downward price trend, rushed to buy back bearish bets. Also contributing to yesterday’s Gold rally was heavy short covering as futures investors, anticipating the start of the delivery period on August contracts, rolled positions from August to December.

Today, Gold traded down to as low as $1,326 before finding fresh buying which rallied the market to $1,338 per ounce. I look for the Gold market to test the next short term resistance level of $1,368 before month end as many professional traders are finally becoming believers and are actively buying on dips.

At 11am PDT today, Gold is trading at $1,335 per ounce, unchanged from yesterday’s close.

SILVER

Silver tested the $20 per ounce support level this morning, reaching $20.11 per ounce in early Asian trading. It is important to mention that Silver held and rallied back to $20.42 per ounce on good volume. Today, Silver has traded between $20.11 and $20.62 per ounce.

At 11am PDT today, Silver is trading down $0.16 per ounce, at $20.30 per ounce on good volume.