Daily Market Report 12/12/12

GOLD

Gold traded higher today on the Federal Reserve’s announcement of additional stimulus starting next month, bring the quantitative easing for 2013 to almost $1 trillion. They also tied future monetary policy to a targeted unemployment 6.5% rate. (We will have more details on this extraordinary policy change in the next Weekly Market Report.) At 11am PDT today, Gold is trading at $1,715 per ounce, up $6.60 per ounce on above average volume of trading.

BANK OF AMERICA IS BULLISH ON GOLD

Bank of America’s John Bilton, European investment strategist, told reporters in London today, “We expect large-scale policy easing by the Fed and the ECB should push Gold prices higher,” the analysts wrote, forecasting Gold prices at $2,000 an ounce for 2013 and $2,400 for the end of 2014. “A stronger Chinese economy will likely lend support to supply constrained metals next year, and we expect copper prices to average $7,750 a ton in the fourth quarter of 2013.”

U.S. TRADE DEFICIT CONTINUES TO INCREASE 

The U.S. trade deficit climbed 4.9% to $42.2 billion in October from a downwardly revised $40.3 billion in September, the Commerce Department said Tuesday. Imports decreased by 2.1% to $222.8 billion, but exports fell by a larger 3.6% to $180.5 billion.

SILVER

Today’s Federal Reserve announcement on additional quantitative easing is much more bullish for Silver. Silver reacted with an immediate 2% rally. At 11am PDT today, Silver is up $0.75 per ounce, trading at $33.68 per ounce with active volume.