Daily Market Report 10/15/14

GOLD

It appears that a convergence of factors are making Gold look like the ultimate safe haven investment. These factors include shockingly weak economic data from Germany; weak economic data here in the U.S.; another huge sell-off in U.S equities; an enormous rally in bonds (which see the 10-year yield below 2%); another big sell-off in crude oil; and another confirmed Ebola case in the U.S.

As the Gold price looked for a direction after average to light trading at the world’s Gold exchanges on Monday and Tuesday, today Gold tested the recent lows and found the buyers. In early Asian trading, Gold traded down to $1,222 per ounce. When the U.S. Markets opened, sizeable buying appeared, driving the price above the $1,250 resistance level on over 225,000 CME hundred-ounce Gold contracts; almost double the Monday and Tuesday trading volume.

I am really impressed with today’s reversal in the Gold market, with the high volume that I have been looking for. This, combined with economic data and the sell-off in the world’s equity markets, could drive Gold much higher. $1,250 per ounce is the key resistance level and if Gold can get back above that, it should change the short term direction from negative to positive.

At 11am PDT today, Gold is trading at $1,242, up $9.60 on excellent volume.

SILVER

In Asian trading Silver found massive support this morning at $17.02 per ounce, its recent support level. Investors are starting to understand that in the near future, the weak economic data will lead to massive stimulus programs (QE4) causing paper money to be devalued versus precious metals. This morning Silver hit a high of $17.82 per ounce before sellers appeared.

At 11am PDT today, Silver is up $0.05 per ounce, trading at $17.45 per ounce on excellent volume.