By Barry Stuppler - MintStateGold.com
Gold is up $12.40 at 11am PDT today, trading at $1,601.40 an ounce on normal light Friday volume. Concerns over negotiations to raise the U.S. debt ceiling is increasing demand for Gold as a safe store of value. House Speaker Boehner stated that “We’re not even close to an agreement” at 8am PDT this morning in the latest update on the status of the debt negotiations. Raising the Debt Ceiling has gone from a virtual surety a week ago, to a question mark. While President Obama and mainstream Republicans are saying a deal will be reached before the deadline, Teaparty Republicans are telling their constituents they will not agree to raise the debt ceiling unless an acceptable debt reduction package is part of the deal. This leads me to comment on a question that I have been asked numerous times in the past week. “What happens to the price of Gold and Silver if the debt ceiling isn’t raised by August 2nd”? If a debt ceiling deal isn’t reached by the weekend, I will provide my answer to this question in my Weekly Market Report that will be emailed out on Monday, July 25th.
Gold sold off yesterday when the Eurozone community reached an agreement to lend Greece another $157 Billion, and extend the maturities on Ireland and Portugal’s debt from 7.5 to 15 years, while lowering the interest rate to 3.5%. Greece will also receive an additional $70 Billion from private sector bondholders by mid-2014. After the agreement was announced, the Euro rallied against the dollar, the shares of European banks holding debt moved higher, and Gold/Silver dropped. It now appears, once again, that the European sovereign debt default problem is temporarily behind us.
Silver is trading at $40.19 per ounce at 11am PDT, up $1.01 in light trading. The overnight markets in Asia and Europe did it again. Heavy demand in these markets provided support at the $39 area and took the price back above $40 again. The U.S. Mint has finally eliminated the backlog of demand for the 1 ounce Silver Eagles and premiums are down $1. Timing is excellent to add Silver to your holdings.
Quote of the Day
From well-known financial analyst Jimmy Rogers
"The gold price is going to go much higher no matter what happens. If the dollar turns to confetti then you pick the number there is no number of how high it will go if it continues to be priced in US Dollars, so it is not a question I even think about, because I am just watching to see how the world evolves, if the world turns paper money into confetti which look like it might do then there is no top for gold and silver and real assets."