Daily Market Report 12/10/12

GOLD

Gold has been higher since the opening in Asia, managing to shake off any negativity of the Fiscal Cliff issue. This is not due to any significant progress in the U.S. government’s negotiations but rather because this week’s FOMC meeting is highly likely to provide more monetary stimulus. Gold has traded in a narrow $15 range today, from $1,718 on the high to $1,703 on the low. At 11am PDT today, Gold is up $10.20, trading at $1,714.40 per ounce on average volume.

RISK/REWARD RATIO FOR GOLD LOOKS EXCELLENT

With Gold trading at $1,714 per ounce right now the risk/reward ratio is in favor of buying Gold. You risk $28 per ounce if short term support of $1,686 is tested, while your reward could easily be $82 when Gold reaches the current resistance level of $1,796 per ounce. The reward could be greater as Gold climbs to the long term resistance of $1,920 per ounce. 

Economists Believe QE Will Continue into 2013

Economists are all but certain that the U.S. Federal Reserve will announce at this coming Tuesday/Wednesday’s FOMC meeting an extension of its monetary stimulus (Quantitative Easing) into 2013. Analysts expect the Fed to continue buying $85 billion worth of securities per month.

SILVER

Silver hit a low of $33.01 earlier this morning before rallying $0.20 per ounce on light volume. At 11am PDT today, Silver is trading at $33.26 per ounce, up $0.23 per ounce from Friday.