Daily Market Update 03/07/12

GOLD

Today we saw a rebound in the Gold market. At 11am PST, Gold is up $10.20 per ounce, trading at $1,684.20 per ounce on normal volume. Gold looks oversold after breaking through the $1,700 resistance levels, and the $1,672 200-Day moving technical support average yesterday.  Physical demand for gold coins and bars is relatively stable in India at present. Gold coins are often a popular choice for investors because they are almost universally recognized as easy to acquire and resell.

Gold is up today, but many gold mining stocks are lower on a major negative news announcement*,

*Another nail in the coffin for gold mine owners versus owning physical gold, Indonesia announced a new rule on the mining ministry’s website, Southeast Asia’s largest economy will require foreign firms to sell down stakes in mines and increase domestic ownership to at least 51 percent by the 10th year of production.

This comes on the back of the usual negatives for owning gold stocks: strikes, labor problems, environmental holdups, and government nationalization. 

SILVER

Silver is looking attractive, rallying back over the $33 price level on excellent volume.  At 11am PST, Silver is trading at $33.40 per ounce, up $0.55 per ounce.

Last week, when Federal Reserve Chairman Ben Bernanke was on Capitol Hill for a congressional hearing, Congressman Ron Paul held up an ounce of silver and told Bernanke that back in 2006 it would have bought over four gallons of gasoline. “Today, it’ll buy almost eleven gallons of gasoline,” he said, adding, “that’s preservation of value.”