Daily Bullion Market Update 7/06/11
Gold was up another $20.10 per ounce today, trading at $1,528.70 at 11am PDT, on negative Eurozone news. Moody’s gave the markets a painful reminder late yesterday that the debt crisis in the peripheral Eurozone countries is far from over. Moody’s lowered Portugal’s credit rating four notches (to Ba2) and further unsettled investors when they claimed that the percentage of non-performing loans on the books of Chinese banks is far higher than originally stated
More Nations disclose large purchases of Gold to dump U.S. Dollar
Venezuela’s central bank increased its gold reserves 12% in the second half of 2010 while its reserves in foreign banks fell 37% in the same period, according to the bank’s year-end financial report. The bank’s gold reserves increased from 37.3 billion bolivars at the end of June to 42.4 billion bolivars ($9.86 billion) at the end of 2010, the bank report said. The central bank’s reserves held in foreign banks fell from 10 billion bolivars in June to 7.32 billion bolivars by year-end.
Iran has bought large amounts of gold in the international market, according to a senior Bank of England official; a sign of how growing political pressure has driven Tehran to reduce its exposure to the US dollar. Andrew Bailey, head of banking at the Bank of England, told an American official that the central bank had observed “significant moves by Iran to purchase gold”, according to a US diplomatic cable obtained by WikiLeaks and seen by the Financial Times. Mr Bailey said the gold buying “was an attempt by Iran to protect its reserves from risk of seizure”. Market observers believe Tehran has been one of the biggest buyers of bullion over the past decade, after China, Russia, and India, and is among the 20 largest holders of gold reserves. They estimate Tehran holds more than 300 tonnes of gold, up from 168.4 tonnes in 1996, the date of the most recent International Monetary Fund data.
Silver was trading at $36.10 per ounce at 11am PDT, up $0.84 on very active buying.
Every time Silver trades on support of $33.50 an ounce we see sizeable purchasing coming from China. Please read the Silver Investing News article “Silver Demand in China Booming” at www.mintstategold.com/investor-education/china_silver_demand_booming/
With this support we are now building a base with a solid floor. When Silver breaks out of its $33.50 / $38.75 trading range I believe it will be to the upside.