Gold & Silver Daily Market Recap: July 12th,2013

Precious metals over the past 4 months have taken a considerable beating. Today we sit at $1280 and $19.80 in gold and silver respectively.

We have seen equity markets surge to all time highs on the heels of better than expected U.S data. The Federal Open Market Committee (FOMC) released their minutes this past week and we saw volatility take reign over the market. Some FOMC members were concerned that "stating an intention to slow the pace of asset purchases, even if the intentions were conditional on the economy developing about in line with the committee's expectations, might be misinterpreted as signalling an end to the addition of policy accommodation or even be seen as the initial step toward exit from the committee's highly accommodative policy stance,” the FOMC minutes said. Fed Chairman Ben Bernanke on the same day spoke and he was clearly much more dovish during this speech than other days. In a Q&A session after a speech in Cambridge, Massachusetts, to the National Bureau of Economic Research, he said that there may not be an automatic increase in interest rates when unemployment hits 6.5 percent. “The overall message is accommodation a highly accommodative policy is needed for the foreseeable future,” Bernanke said quite bluntly. This sent the metal moving higher in early trade in the evening session and pushing the metal to just under $1300. The metal has lost some ground for the close of the week, but on a weekly basis we are closing higher.

Spot silver has had a similar fate, after dropping to a low of $18.22 the metal has rallied off of the back of a stronger gold market. The grey metal has ran into significant resistance at $20.30. US Federal Reserve Chairman Ben Bernanke indicating a continuation of stimulus measures will act as a major supportive factor for prices, while Chinese data being released over the weekend will dictate direction.

Expect renewed buying interest and short covering if the metals can overcome big resistance at $1300 and $20.29 respectively. We have seen great physical demand from Asian markets. We will watch this weekend for some signals on the Chinese economy as key data is released. The U.S dollar has lost some ground in recent days after the release of the FOMC minutes which has propelled precious metals markets higher.  We have come upon the summer doldrums when most traders and hedge funds get away for the summer. Expect range bound trading for the next 4 weeks with an eye for the metal to move higher.

                                                   GOLD                                SILVER   
Support                                       $1260/$1207                       $19.00/$18.75
Resistance                                  $1300/$1325                       $20.30/$21.75

July 12th Closing Prices

Gold                                                 $1278
Silver                                                 $19.78
Platinum                                             $1410
Palladium                                            $722