Daily Bullion Market Update 7/20/11

By Barry Stuppler – MintStateGold.com

GOLD

After a selloff in Gold late yesterday, following President Obama’s announcement that the Senate’s ‘Gang of Six’ has come up with a plan to settle the debt ceiling problem, the gold market is rallying back. Gold dropped to $1,580.00 in reaction to the announcement and today Gold has regained its mojo. At 11am PDT Gold is trading at $1,597.90, unchanged from yesterday at this same time.

Although I recommend owning Physical gold, it appears that the people want to own Paper gold. The SPDR gold ETF added nearly 83,000 troy oz last Friday, which was the second largest increase on record.  Gold is clearly in the minds of the public right now as a safe haven hedge against the current economic and political climate.

 

SILVER

Showing its greater volatility, Silver reacted to the President’s statement by dropping $1.94 an ounce in late trading yesterday, but has recovered today trading at $39.70 per ounce at 11am PDT. Silver trading last night in the Asian markets continues to amaze me, especially with this being July; both China and India become aggressive Silver and Gold buyers on any dip in price.

I now believe Silver should continue its breakout, reaching its April 25th high of $49.84 before the end of the year, or right after an announcement of the next round of monetary easing.

 

Other Important news that effects precious metal prices:

  • As I pointed out in my Weekly Market Report, one of the many concerns about owning gold/silver mining companies with properties in developing nations is nationalization, that problem isn’t going away.
  • Fraser Institute resource policy director Jean-Francois Minardi confirmed that one of global investors’ main concerns was talk around nationalization in South Africa.
  • Five of the 15 states with top bond ratings from Moody’s Investors Service may be downgraded because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail. Maryland, South Carolina, New Mexico, Tennessee, and Virginia are under review, New York-based Moody’s said today. The action affects $24 billion of general-obligation and related debt, it said. The states are rated Aaa, Moody’s top municipal grade
  • Sales of previously owned U.S. homes unexpectedly declined in June to a seven-month low as the industry struggled to overcome rising unemployment and foreclosures. Purchases dropped 0.8 percent to a 4.77 million pace, data from the National Association of Realtors showed today in Washington.
Posted in: Bullion & Metals

About the Author:

Barry Stuppler & Co. offers a great selection of gold and silver, rare and investment quality coins to our valued clients. As the current elected president of the 30,000 member American Numismatic Association (ANA) and the president of the California Coin and Bullion Merchants Association (CCBMA), Barry Stuppler brings expertise and integrity to the numismatic trade.

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