By Barry Stuppler – MintStateGold.com

GOLD

Gold is trading at $1,740.22 per ounce this morning at 11am PDT, down $36.28 per ounce on normal volume. At one point in overnight trading in Asia gold hit an All-Time high of $1,815.40. What the gold market could use right now is a week or two of stabilization so it could build a nice base for the next leg up.

The Commodity Market just raised the margin requirements for 100 ounce Gold contacts to $7,425 from $6,075. That’s a 20% increase for new positions and negative news, but the gold market just shakes it off.

The Chairman of one of China’s largest gold and copper mines, Zijin Mining Group Co Ltd, forecasts gold prices to reach $1,900 per ounce by the end of 2011, as the U.S. dollar is likely to weaken further.

SILVER

Silver is down $0.51 per ounce as of 11am PDT, trading at $38.51 on average volume. If gold can build a trading base from $1,750 to $1,800, I believe silver could sell off and settle in the $36 – $37 range based on seasonal weakness and no clear direction for future inflation.  Hopefully, this can change if the Federal Reserve announces a monetary easing program at the Jackson Hole meeting on August 26th.

Other Important news that affects precious metal prices:

  • The Dow Jones Industrial Average dropped 519 points yesterday primarily because the stocks of French banks dropped sharply amid fears of a French downgrade, dragging down European shares of many of the largest banks in France.
  • The exchange rate of the Swiss franc against the US dollar hit a new record high of $1.36 dollars to one swiss franc. Five years ago, the exchange rate was $0.81 dollars to one Swiss Franc. This is a 68% increase in the past five years.
 

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