Daily Market Report 9/27/12

GOLD

Weaker U.S. economic data (see below) has led to a weaker U.S. Dollar, and stronger energy and precious metal prices. Today’s Gold rally makes it seven weeks in a row that the largest weekly increase in price has come on a Thursday or Friday. At 11am PDT Today, Gold is up $25.70 per ounce, trading at $1,777.90 per ounce on heavy trading.

SILVER

Silver has followed Gold’s lead and traded firmly above $34 per ounce all day. When Silver breaks through the $35 per ounce resistance level again, it should be off and running on the way to $38 per ounce. The Silver price has been far more explosive than Gold since the QE3 announcement, (see Morgan Stanley predictions below). At 11am PDT Today, Silver is trading at $34.66, up $0.61 per ounce on heavy trading.

Morgan Stanley Predicts Silver will Increase Faster than Gold

Morgan Stanley says if history is any guide, “Silver will beat Gold after the Federal Reserve announced a third round of debt-buying and central banks from Europe to Japan pledged more action. Silver rose about 53 percent in the Fed’s first quantitative easing from December 2008 through March 2010, twice as much as Gold, and 24 percent during the second phase ending in June 2011, three times as much. Silver will probably keep beating Gold in the next several quarters.”

Weaker U.S. Economic News

A combination of U.S. second quarter GDP numbers being revised lower, from 1.7% to 1.2% with a U.S. durable goods order dropping 13.2% in August has confirmed the reasons the Federal Reserve launched QE3 two weeks ago.