Daily Market Report 8/31/12

GOLD

After Federal Reserve Chairman Ben Bernanke said Friday he’s open to enact more quantitative easing to help bring down U.S. unemployment, precious metals rallied sharply. Remember, the Fed has a dual mandate to keep inflation under control and stabilize employment, and indicators aren’t looking good. With a clear signal that our Federal Reserve is prepared to add additional monetary stimulus if we see negative economic news in the near future, the precious metals become very attractive to investors. Gold rallied on the news, breaking through the $1,680 resistance level and on its way to test the $1,700 level. At 11am PDT, Gold is trading at $1,683 per ounce, up $24 per ounce, on excellent volume for a Friday ahead of a holiday weekend.

SILVER 

After the above news was released the Silver price increased at a higher percentage. Remember, monetary stimulus has a greater effect on Silver than Gold. At 11am PDT, Silver is up $0.98 per ounce, trading at $31.47 per ounce on heavy volume for a Friday.