Daily Market Update 12/14/11

GOLD

Yesterday, Gold and silver fell in late trading after the U.S. Federal Reserve sounded more upbeat on the U.S. economic outlook, which dimmed the likelihood of more quantitative easing (QE3) in the near future. This morning news from Europe was still very negative and concerns over a sovereign and banking debt crisis caused gold to break down below $1,600, and the U.S. Dollar to rally sharply versus the Euro ($1.29). After Gold broke the important $1,600 resistance support number, we saw selling from floor traders, playing the trend, and panic selling caused by margin call liquidation that took gold down to $1,562 per ounce. At 11am PDT, Gold is trading at $1,588 per ounce. Back in September, when the gold price corrected after reaching $1923.70 on Sept 6th, it traded as low as $1,535 on Sept 26th before bouncing back. Some market analysts believe that $1,535 has major support and should stop this correction.

SILVER

Breaking the $30 per ounce price level was a disaster for Silver. Panic commodity market selling took the market down to $28.42 before sizeable buying came into the market. The price correction isn’t unique to Gold and Silver, all precious metal, oil and gas and many other commodities are down sharply today. Economists and Banking experts are saying the European debt crisis is likely to lead to a serious recession or depression if actions are taken quickly and that Germany is resisting the pressure to act. At 11am PDT, Silver is down $1.77, trading at $29.17 per ounce on very heavy volume.