Daily Market Update 12/20/11

GOLD

Yes. With a little positive news out of Europe, gold broke above the $1,600 per ounce resistance level. The Euro rose against the U.S. currency after Europe pledged 150 billion euros ($196 billion) to the International Monetary Fund to help stem the region’s debt crisis, and as the European Central Bank widened its support for bond markets. Gold gained on European markets after German business confidence unexpectedly rose for a second month in December. Gold was also up today after Spain raised more than €5 billion in its latest debt auction and saw strong demand and lower borrowing costs. Greece also raised more than €1 billion for three months at relatively stable borrowing costs.

"We are seeing a Santa Claus rally in precious metals," says George Gero, senior vice president at RBC Capital Markets. "We are now back to that 200-day moving average number that was breached [last week] and a close there or above may signal a good technical rebound."

With gold trading around $1,600, demand has picked up substantially. Buying interest has picked up handsomely in India, Thailand, Indonesia and China. At 11am PDT Gold is trading at $1,616 per ounce, up $22 for the day on heavy volume.

SILVER

A weaker dollar versus the Euro was also bullish for Silver. Silver took its lead from Gold and at 11am PDT was up $0.57, trading at $29.55 per ounce on excellent volume.