Daily Market Report 10/17/13

GOLD

Gold rallied $40 per ounce today on heavy volume of buying as the dollar stumbled. As congress kicked the national debt can down the road, precious metals moved higher on the belief that this temporary deal to avoid a historic U.S. debt default will cause the Federal Reserve to delay any reduction in its monetary stimulus.

A substantial increase in trading volume was seen in COMEX gold futures exchange in early European trading hours, with more than 17,000 hundred ounce contracts (1.7 million ounces of gold) were purchased in just ten minutes.

The most important thing is that gold has broken back above the very important $1,300 per ounce support level as we approach the highest physical demand time of the year.

$1,300 per ounce for gold is a key bull/bear battle on the U.S. commodity exchanges, and with today’s rally the bulls are in firm control. Today’s pivotal move in Gold makes me believe that it is off and running back to the $1,400 price level in the short term with many professional traders now back on gold’s bullish bandwagon.

At 11am PDT today, gold is up $40 per ounce, trading at $1,323 per ounce on heavy volume.

SILVER

Considering that both gold and platinum rallied $40 per ounce today it would be very disappointing if silver couldn’t get back above the $22 per ounce level. Early this morning silver briefly rallied above $22 level, but couldn’t hold.

At 11am PDT today, silver is trading at $21.93 per ounce, up $0.60 per ounce on above average volume.