Daily Market Report 10/8/14

GOLD

Yesterday the International Monetary Fund (IMF) released a report stating that the weak European countries’ economies will put downward pressure on global growth. This bearish forecast drove down the world’s equity markets, with the U.S. Dow Jones dropping 272 points. The forecast also affected the U.S. Dollar, driving down its value. This bearish economic announcement should have been VERY bullish for Gold and Silver prices. Why? Because it means that the major world governments are likely to stimulate their economies by printing lots of money. Gold increased $5.10 per ounce, reaching $1,212 per ounce on average trading volume. I was hopeful that a larger rally would happen on this type of news. The good news is that Gold did stay above the key $1,200 per ounce for the second day in a row.

Today, Gold attempted an upward breakout, reaching $1,221 per ounce, but was hit with heavy selling, driving the price down to $1,205. Although Monday’s $14 Gold rally was encouraging, the lack of more price support is a negative. Right now, I think Gold will probably test the important $1,200 per ounce support level very soon.

At 11am PDT today, Gold is down $6 per ounce, trading at $1,206 per ounce on average volume.

SILVER

Silver reached a high of $17.62 per ounce yesterday. At that point trading volume picked up and short sellers drove the price down $0.15 very quickly. Today the Silver price reached $17.46 and again sellers drove down the price $0.30 per ounce. The short term direction of Silver is clearly lower.

At 11am PDT today, Silver is trading at $17.08, down $0.15 per ounce on average volume.