Daily Market Report 11/13/12

GOLD

At 11am Today, Gold is trading at $1,726.40 per ounce, down $4.80 per ounce on average volume of contracts. Earlier this morning, Gold did reach $1,717.60 per ounce on light selling until we saw an increase in demand. 

SILVER

Silver today is trading in a narrow range $0.72 price range, from a low of $32.10 and a high of $32.82 on light volume. At 11am PDT Today, Silver is at $32.46 per ounce, down $0.04 per ounce, consolidating on average volume.

SILVER AND THE FISCAL CLIFF

Yesterday in my Weekly Market Report I said “If we go over the Fiscal Cliff, the price of Silver will drop dramatically.” I received a number of emails asking why I believe that to be true. While Gold is your ultimate monetary hedge, Silver is your ultimate inflation hedge, and if Congress is not able to settle the Fiscal Cliff issues, the increased taxation and spending cuts could quickly push the economy into a recession or worse. A serious contraction in the U.S. economy would negatively affect both Gold and Silver prices, similar to the financial crisis of 2008, but Gold quickly rallied back, while Silver needed signs of a recovery to move higher. Conversely, if the Fiscal Cliff issues are settled, we should see a rally in Gold and Silver, with Silver’s price increasing at a higher percentage.