Daily Market Report 9/21/12

GOLD

This morning there are creditable reports of a serious new proposal coming from the ECB to resolve Spain’s debt problem. This news has caused the US Dollar to fall in value versus the Euro and Gold and Silver to rally sharply. Gold reached $1,790 on heavy volume of trading based on this news before we saw resistance and short term profit taking, which took Gold back down to $1,774 per ounce. At 11am PDT Today, Gold is trading at $1,777.40, up $7.20 per ounce on high volume for a Friday.

The Chicago Mercantile Exchange (CME) is the largest precious metal exchange within the United States and price of Gold, Silver, Palladium and Platinum is established on that exchange daily. The CME open interest for the most actively traded December 2012 Gold contract (333,772 - 100 ounce contracts) is now at all-time highs. This combined with Gold trading at an all-time high price valued in Euros and Indian Rupees, makes the current outlook for Gold VERY BULLISH. 

SILVER

Silver broke out above $35 per ounce on this morning news of a possible agreement by the ECB to settle the Spanish debt problem before reaching resistance at $35.26, before seeing sizeable profit taking. Silver has very active trading today, and at 11am PDT, is trading at $34.62 per ounce, down $0.13 per ounce on good volume.

South Africa’s Mining Strikes Continue

In South Africa, miners stopped working at AngloGold Ashanti’s Kopanang mine to demand higher wages mere hours after Lonmin signed a deal to end a strike at its Marikana Platinum mine by offering a pay rise to striking employees. The National Union of Mineworkers said the strikers at Kopanang are demanding a wage increase to 12,500 rand per month. Workers at Marikana ended their strike Wednesday after agreeing to a 22-percent raise and a one-time lump payment of 2,000 rand. Several market observers have warned that the Lonmin deal set a dangerous precedent and that further disruption to the sector was likely to follow.