Daily Market Update 12/16/11

GOLD

Trading volume remained heavy overnight as the gold price stabilized, but gold didn’t rally back above $1,600 per ounce, which will act as a minor resistance level. I would like to see Monday’s trading take the price above $1,600 to feel that the correction is over. This week’s gold trading reminds me of what happened in October 2008, when the U.S. Financial markets and banks were facing a crisis similar to what is happening in Europe. I’ll go into more details on the similarities in Monday’s Weekly Market Report. At 11am PDT, Gold is trading up $23.40, at $1,595.40 per ounce on average trading volume.

SILVER

This week silver hit a low of $28.00 per ounce, when sizeable buying came in. Last night the buying continued and the price rallied up to $30, when we saw some resistance. At 11am PDT, Silver is trading at $29.62, up $0.44 for the day on normal light Friday trading volume. Monday is going to be an important trading day, if gold can rally over $1,600 and/or Silver move back above $30 per ounce, floor traders could get bullish thinking the correction is over.