By Barry Stuppler - MintStateGold.com
One stimulus plan down, one to go. Last night we heard a fiscal stimulus plan from President Obama. Earlier today we heard that Federal Reserve Chairman Ben Bernanke will explore launching a monetary stimulus program (QE3) at the FOMC meeting later this month.
How did the Gold market react to hearing Obama propose the America Jobs Act of 2011? Initially we saw a small sell off, with gold falling $10 (down to $1,852 per ounce) before we saw Asian support. Gold remained strong overnight in Asia and Europe, holding Thursday’s New York Gold price in the $1,840 -$1,850 area. The focus of Gold traders today is the possibility of Greece defaulting on their debt, as European financial ministers meet in France. Gold is up today with a strong U.S. Dollar, which has been moving higher versus the Euro (1.368). At 11am PDT Gold is at $1,861.40, up $6.10 per ounce on light pre-weekend trading.
Interesting gold news item... Gaddafi sold 29 tonnes of Gold from the Libyan Reserves last month to raise $1 Billion to pay salaries and other expenses. The interesting fact is that the quantity of gold had no effect of the uptrend of gold and it was purchased at current market related prices?
Silver looks at its establishing a new and higher trading range of $41.00 to $42.50 per ounce. Today, Silver is down, trading $41.70 per ounce, down $0.66 at 11am PDT. The market has been showing excellent support and represents excellent value, as we await the next round of quantitative easing.
Eurozone Debt Update
The Eurozone debt crisis is worsening. We are see the destruction of confidence in Europe's financial institutions, driving up market borrowing costs and forcing the ECB to widen its bond purchase program to Italy and Spain. The ECB also cut its growth forecasts for this year and next, and abandoned its warning about looming inflation threats. Julian Callow, chief European economist at Barclays Capital in London said, "The situation has deteriorated so much that they should throw in the kitchen sink; the ECB could cut rates and offer banks unlimited liquidity for up to a year, or deploy a combination of those measures.” G7 finance ministers and central bankers will meet in France today to discuss the slowing economy, sovereign debt issues, and the health of European banking system.