Gold closed at $1,522.90, down $5.70 an ounce on average trading volume. The Gold market is taking direction from the Greek debt crisis. As the situation appears to be heading to a Greek debt default --- gold and the dollar rally. When information comes out about a possible resolution to the problem --- gold and the dollar sell off. The president of Greece, Karolos Papoulias, has called a meeting of the country’s political heads to work out the issue tomorrow. The Greeks could be calling a premature election to ensure the government has the authority and clear mandate to proceed with the reforms needed to form a coalition government.
Gold is also being supported by robust jewelry demand - the Bombay Bullion Association expects India's gold imports to reach a record level of 1,000 tonnes this year if the monsoon season is good.
Silver was down $0.38 today, closing at $37.33 an ounce on active trading with a $1.30 range from high/low. After two weeks of base building, hitting support levels, and rallying, silver is showing more volatility. The $35 price level has excellent demand support, while $39 per ounce is a key resistance area.
Increased Chinese appetite for silver investment products, combined with a forecast 16 percent annual growth in industrial demand, means China's total silver consumption could outstrip domestic supply this year, "There is a widening demand for silver as investment in China because of its lower entry point. It is also being increasingly recognized as a physical investment asset, which will support demand.
Today's Other Important News that affects precious metals:
- Asian investors including the Chinese government are expected to represent a “strong proportion” of the buyers of Portuguese bail-out bonds when the Eurozone’s €440bn rescue fund begins auctioning them next month, according to senior fund officials.
- The global platinum surplus may jump eightfold after Japan’s worst earthquake slashed car production, reducing the country’s demand to the lowest level in 28 years. Supply will probably outpace demand by as much as five metric tons this year, compared with a surplus of 600 kilograms last year. The world palladium shortage may be cut by half.
- The Commerce Department report today that the U.S. economy expanded at a 1.8% annual rate in the first quarter, the same growth rate as estimated a month ago. The first quarter growth rate was much weaker than expected. Economists were predicting a revision to a 2.2% rate. The major surprise was a downward estimate to consumer spending, to a 2.2% annual rate from the initial estimate of a 2.7% rate.
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The Daily market Update is written by Barry Stuppler at www.MintStateGold.com