Daily Market Report 9/23/14

GOLD

The U.S. Dollar has gained 7% approximately in value against the Japanese Yen and the European Euro in the past couple months. This is important to Americans, because we look at the value of Gold in U.S. Dollars. At current Gold prices, 7% is equal to $85 per ounce. This is one of the primary reasons the Gold price looks so attractive at current price levels.

Why is the Dollar so strong versus these two currencies? Because of the economy; while the U.S. economy is firmly in a sustained recovery, the Japanese and European economies continue to be in a recession, bordering on depression. These weak economies drive international investors to U.S. equity markets, and their funds need to be in Dollars.

Today Gold rallied sharply in early trading, reaching a high of $1,234 per ounce. At that point short term sellers appeared driving the price down to $1,218 per ounce. Trading volume is still strong, but I am concerned about professional traders, who have the mind set of selling or shorting Gold and Silver on rallies. I continue to think we will see Gold test the lows by month end, before turning higher.

At 11am PDT today, Gold is trading at $1,221.40, up $4 per ounce on average volume.

SILVER

Silver followed Gold higher during this morning trading. At one point, Silver rallied above the $18 per ounce resistance level, reaching $18.02. This was short lived and the price quickly dropped back to $17.80 on heavy selling. Silver will continue to follow Gold for price direction.

At 11am PDT today, Silver is down $0.03, trading at $17.81 per ounce on normal volume.