Daily Bullion Market Update 8/12/11

By Barry Stuppler – MintStateGold.com

GOLD

Overnight trading in Asia was very supportive to the current price range. Finally, we are seeing stability in the gold trading which had a 2 ½ % trading range in the last 24 hours.  The low to high trading range for gold was $1,724/$1,769 with excellent volume. I would be very happy to see Gold stay in this trading range for at least a week, while building up another firm base for the next leg up. I always love seeing the talking heads on the financial stations saying gold is coming down, they haven’t been right for 11 years but they are still talking bubble. At 11am PDT today gold is trading at $1,742.24, up $2.02 per ounce on normal Friday volume.

American commodities investor Jim Rogers spoke to the “Economic Times” of New Delhi about the recent surge in gold prices and the reasons behind it. He said, “Governments all over the world are debasing currency. Yesterday (Tuesday) the U.S. Federal Reserve said it will continue to debase their currency. The more the governments will debase paper currency, people will take refuge in real assets, and gold is one of them.” Rogers explained his future gold trading strategy. “Well, I own gold, and I see gold breaking new highs and racing up. I don’t like to buy things when that is happening. When gold goes down, I will buy more gold. Gold is going straight up. It will probably correct somewhere, and I hope it will correct somewhere along the line, and if it does I will buy more”.

SILVER

I’m starting to feel more optimistic about Silver as I’m seeing more stability in trading.  In the face of lower Gold price I am seeing a lot more support for Silver at the $38.00 level in overnight trading in Asia.  Silver is currently trading at $39.15 at 11am PDT. That is up  $0.64 per ounce.

INFLATION UPDATE

Food commodities prices surged after the US government slashed its forecast for the country’s crops due to the impact of a heat wave and drought. The US Department of Agriculture painted a bullish picture in particular for corn prices, saying: “Unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.” Higher corn prices rapidly translate into more expensive beef, lamb, pork, and poultry and, thus, higher food inflation.

Palladium and Platinum

We are finally starting to see support for these Platinum group metals. Both metals are down substantially over the past few weeks.  Earlier this week Platinum was actually trading lower than the spot gold price.

These are considered industrial metals and the fear of a double dip recession was weighing heavily on trading.

Other Important news that affects precious metal prices:

  • The Commerce Department stated late Thursday that the U.S. trade deficit widened by 4.4% in June to $53.1 billion. This is the largest deficit in almost three years.
  • Retail sales rose a seasonally adjusted 0.5% last month, the largest increase since April, the Commerce Department said Friday. Economists surveyed by had expected sales to increase 0.7% overall.
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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