Daily Bullion Market Update 8/2/11
By Barry Stuppler – MintStateGold.com
With the debt ceiling issue behind us, and a brief selloff in Gold, we are ready to move higher. The gold market is setting new All-highs again amid concerns over a double-dip recession coupled with the now surety of the Federal Reserve announcing some form of monetary easing very soon. Interest rates and the Stock Market are heading lower, so what is left? GOLD. Gold is up $20.40 today, trading at $1,641.70 at 11am PDT on very heavy volume. Like I said in yesterday’s Weekly Market Report, it’s Gold, so it is OK to add more at new all-time highs, central banks are.
Recent U.S. manufacturing and consumption news is showing a very weak economy. The ISM manufacturing index for July at 50.9 implies slowing manufacturing, and consumer spending fell 2% in June.
These are indicators that our economy needs some type of stimulus quickly to prevent a possible double-dip recession.
Add South Korea to the list of the Worldwide Central Banks exchanging U.S. Dollars for Gold. During the months of June and July of 2011, South Korea more than doubled the gold held in their nation’s reserves. The South Korea’s central bank bought gold for the first time in more than a decade. The Bank of Korea bought 25 metric tons of gold, raising its gold holding to 39.4 metric tons, or 0.4 percent of its total reserves.
Silver is back above $40 per ounce, trading at $40.10 at 11am PDT today. Silver rallied $0.75 per ounce today, taking its direction from the heavy demand for gold. Physical demand for Silver has slowed down, which is normal for August. The next resistance level for Silver is $41.27, which is the three month high.