Daily Market Report 8/28/13

GOLD

In Asia this morning, Gold rallied above $1,433 per ounce as India’s currency (Rupee) made its single largest drop in value versus the U.S. Dollar this year. The Rupee reached 68.80 rupee’s to one U.S. $1 today, compared to 56.75 to a Dollar at the beginning of the year, a 20% drop. India’s citizens love Gold and that’s a 20% increase in the price of Gold, just in foreign exchange costs.

Investors like Physical Gold not mining stocks or mutual funds

Yesterday was an interesting trading day in the precious metal market. While both Gold and Silver rallied over 2% (Gold up $26, and Silver up $0.58) Gold and Silver mining stocks were down from 3% to 5%. For many years the easiest way to invest in Gold and Silver was to purchase Gold/Silver equities or mutual funds. Now, considering all the problems many of the Gold and Silver mining companies are having it is clear that investors are moving to paper or physical Gold.

Citigroup Analyst sees Gold at $3,500 per ounce

Tom Fitzpatrick, a technical analyst from CITI (Citigroup Banking Corporation), said “We believe we are back into that track where Gold is the hard currency of choice, and we expect for this trend to accelerate going forward. We still believe that in the next couple of years we will be looking at a Gold price of around $3,500”

At 11am PDT today, Gold is up $2 per ounce, trading at $1,421 per ounce on excellent volume.

SILVER

Today we saw some short term profit taking in the Silver markets. This is not surprising considering the recent sharp rally. At 11am PDT today, Silver is trading at $24.38 per ounce, down $0.22 on average volume.