Daily Bullion Market Update 6/23/11
By Barry Stuppler – MintStateGold.com
At 11am PDT Gold is trading at $1,523.80, down $29.80 per ounce (1.9%) in very active trading. After seven up-days in a row for Gold and Silver, with Silver increasing over $2 an ounce and Gold up $38, it took a Fed Chairman Ben Bernanke news conference and a release of 60 Million Barrels of Oil to break the streak. After yesterday’s news conference the Dollar rose against the Euro and crude oil sold off. Since the Federal Reserve gave no hint of providing further economic stimulus, Gold and Silver came off the day’s highs, although the Fed held on to its position of keeping interest rates low for an extended period. Again, this is not surprising to me, as I expect the next round of quantitative easing to come in August at the Fed conference in Jackson Hole, WY after Congress increases the debt ceiling. I believe that a new round of quantitative easing is needed to avoid a double dip recession and to stimulate the economy before next year’s elections.
The release of crude oil from the U.S. Strategic Petroleum Reserve is a major step to revive a struggling U.S. economy and avoid the possibility of a double dip recession. Lower gasoline prices should stimulate consumer spending in the third quarter of this year.
Silver reacted to the crude oil release and a stronger U.S. Dollar today with a correction of $1.31, trading at $35.34 an ounce at 11am PDT. Trading was very active today with substantial support at $34.70 per ounce. This is an excellent entry point for Silver investors, as today’s price is at the lower end of the trading range. I look for a major Silver rally when the next round of quantitative easing is announced in August.
Today’s Other Important News:
Barclay Capital said that China palladium imports for 2011 is expected to exceed 2010 totals. Barring any near-term weakness, China’s net palladium imports are expected to exceed last year’s total of 945,000 oz, albeit at a slower pace, according to Barclay’s analysts.