Daily Market Report 12/10/13

GOLD

Based on strong economic news from China and Japan, Gold rallied overnight in Asia and continued to rally in London and on the CME. Traders, who were short Gold, covered their sales when spot Gold broke above the $1,250 resistance level. Gold’s heavy trading volume took it up $34, to $1,268 per ounce before some profit taking came in. Most professional traders are on the sidelines watching to see if Gold can hold above the $1,250 support level tomorrow. At 11am PDT today, Gold is up $28 per ounce, trading at $1,262 per ounce on heavy volume.

Inflationary Spiral Underway in Japan

Japanese Prime Minister Shinzo Abe’s campaign against deflation has achieved impressive early success. However, not everyone is happy with the emerging inflation, such as consumers who still have not seen their wages increase and small businesses whose material costs have risen faster than the prices they can charge their customers. Both groups are among those struggling amid growing questions about whether the policy is working.

SILVER

Silver traded in a very narrow range today, with $19.43 as the low and $19.85 as the high. Considering today’s Gold rally, I was disappointed not to see Silver attempt to break above the important $20 resistance level. At 11am PDT today, Silver is up $0.20 per ounce, trading at $19.72 per ounce on normal volume.