By Barry Stuppler - MintStateGold.com
Gold opened $10 lower in Asia before sizeable buying came into the market. After the extraordinary trading last week that virtually set new record highs daily, it is nice to see gold stabilizing and trading in a narrow band. Gold has traded in a $20 range today, holding at $1,753.20 per ounce, up $8 from last Friday’s close. Today’s weaker U.S. dollar (versus the Euro) is helping to support the Gold price. The basic fundamentals for gold’s continued price increase are looking better and better each day Remember, physical gold demand is approaching the strongest period of the year - fabricators typically restock in September ahead of the Indian festive and wedding season and the Christmas holiday in other countries.
The World Gold Council stated today that on a net basis, central banks bought about 208 tonnes of gold in the first half of this year. This is a record pace for central bank purchases and after the downgrade of U.S. debt I expect the pace will pick up in the second half of 2011.
I’m starting to like the way Silver is trading, it didn’t want to break below $39 in overnight trading regardless of the fact that gold was down $12 at one point. I believe we are also seeing a value play here with the silver/gold ratio at 44 ½ to 1.