Daily Market Report 10/18/12

GOLD

Since falling after reaching $1,800 per ounce earlier in the month, Gold has trended lower in six of its last eight trading sessions. Gold found support on Monday at reaching $1,730 per ounce. We are now in a consolidation phase, which could prove to be a good buying level for investors. The $1,800 per ounce level does represent a substantial short term resistance. Today, Gold has been trading in a very narrow $11 price range. At 11am PDT Today, Gold is down $6.90 per ounce, trading at $1,744.00 per ounce on normal volume.

CHINA’S ECONOMY IS SLOWING DOWN

It was reported today that China’s gross domestic product expanded by 7.4% in the third quarter from the same period a year earlier. This marks the seventh consecutive quarter of slowing growth in the world’s second-largest economy. China is on track for its weakest annual growth since 1999. This is being caused by a slowing domestic economy and weak demand from major export markets, particularly Europe, which has been the largest recipient of Chinese exports for years. What does this mean? With a slowing economy the Chinese are more likely to engage in a stimulus program, which is bullish for Gold. 

SILVER

It’s becoming clearer and clearer that Silver wants to stay above $33 per ounce. This morning every time Silver dropped below $33 per ounce, the volume and demand picked up and it rallied back up. At 11am PDT today, Silver is trading at $32.96 per ounce, down $0.34 per ounce on average volume.