Wednesday, December 15, 2010

Gold Silver Dec 15th, 2010

Gold has been up and down over the past week with no definitive trend in place.  It ended down $16+ today with a close of $1388, below the 13 DMA. If the previous break low of $1372 is taken out, Gold may start a downtrend with support at the lower trend line of ~1368 and the 50 DMA of 1363.

There are plenty of reasons why Gold should end the year strong:
  • European debt issues
  • China and India demand.  China also opened a 'Lion' fund for investment.
  • Christmas jewelery demand.
  • QE2
  • Financial market uncertanty

Silver closed down 1.78% to $29.26, above the 13 DMA. It should stay above the last break low of $28.07 to remain in a upwards trading range and to keep the trend in tact.

Silver is up 69.7% year to date while Gold is up 27.3%.
The Gold/Silver ratio is 47.4 and dropping. In Feb of this year, it hit a high of 72.08.

Silver is still trading well below the 1980 high of $50 while Gold surpassed the 1980 high of $850 in 2008.
Investment demand remains strong with all of the US Silver eagles out of stock at the US Mint.

From the US Mint website:

Production of United States Mint American Eagle Silver Uncirculated Coins continues to be temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Until recently, all available silver bullion blanks were being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”
Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin.
However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.
The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.

We are accumulating physical Silver and ETF's on all pullbacks.

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