Daily Bullion Market Update 6/29/11
By Barry Stuppler – MintStateGold.com
Gold rallied in Asia as news from Greece indicated that the parliament was going to pass the austerity plan. Finally, in the face of a nationwide 48-hour strike and violent clashes in the Greek capital of Athens, the Greek parliament has voted in favor of a drastic $40.3 Billion package of austerity measures intended to save the country from defaulting on its debts. The proposed tax hikes and spending cuts have been deeply unpopular with the Greek public. After the announcement, crude oil led many commodities higher, with Gold trading at $1,508.50 at 11am PDT, up $7.10 an ounce in active trading. Crude Oil gained $2.00 a barrel, while the Euro rallied against the U.S. Dollar. Gold, staying above the important $1,500 price barrier, is a bullish factor, but I would like to see gold break above $1,520 next week to get more bullish.
One of the questions I am continually asked by gold investors is “What will happen to the gold price if interest rates start to rise?”
I plan on going into great detail about this in next week’s Weekly Market Update which will be emailed out on Tuesday July 5th. In the meantime, there is a great article in today’s Wall Street Journal by Larry Lindsey (Former Federal Reserve Governor) on the deficit and the effects of future interest rate increase.
Read the article at www.mintstategold.com/investor-education/deficit_worse_than_we_think/
Silver is trading at $34.76, up $0.84 an ounce at 11am PDT. Silver took its direction from the Gold price and the Greek situation. Demand for physical Silver has slowed down in the U.S. and the premium for U.S. Silver Eagles has dropped 10%, while demand for Silver bullion products in Asia has increased due to the attractive lower price. As we approach the U.S. July 4th Holiday, our markets will be closed for the extended weekend, reopening on Tuesday July 5th. Watching what happens in Asia during this period, and our market trading on July 5th, will be an excellent indicator for the Silver price direction.
SILVER STARTS TRADING ON CHINA’S 1st PRECIOUS METAL SPOT EXCHANGE
China’s first precious metals spot exchange began trading Tuesday in Chengzhou in Hunan Province. The Hunan South Rare Precious Metals Exchange is based in China’s silver capital in Yongxing County. Its first four products to be listed are silver, bismuth, indium and tellurium.
Launched with a total investment of 260 million yuan (US$40.2 million), the exchange will offer long-term electronics transactions including spot trading, precious metal products and raw materials, and spot deferred transactions on up to 18 precious metals products. It will also provide financial consultation, pricing information, supply and demand, market research reports, and business consultations relaying on an e-business information technology.
“The goal of the exchange is to achieve a total trading volume of 1 trillion yuan (US$155 billion) by the end of 2015. By then the exchange will contribute 1 billion yuan in taxes per year,” said Cao Minghui, exchange general manager, during the opening ceremony Tuesday.
Massive palladium campaign to launch in September 2011
Palladium Alliance International (PAI) is partnering up with celebrities Pamela Anderson, Kelly Osborne, and Rose McGowan for a new campaign to promote the metal’s use in fine jewelry.