Daily Precious Metals Market Update 6/07/11
By Barry Stuppler – MintStateGold.com
Gold fell $1.10 an ounce today to $1,536.00 with trading in a very narrow range. Gold firmed up above the $1540 level on weaker prices for the U.S. dollar and crude oil. The market is awaiting direction from the Federal Reserve Chairman. Ben Bernanke is speaking this afternoon to the International Monetary Conference at 12:45pm PDT, in Atlanta, just before the NY Stock Market closes. His statement should give us a hint as to the Fed’s reaction to the recent round of weak U.S. economic data. I don’t believe he’ll be announcing any additional stimulus programs or monetary easing until after Congress agrees to lift the U.S. debt ceiling later this month.
The head of the international payment department at China’s foreign exchange regulator said on Tuesday that Beijing should guard against risks from excessive holdings of dollar denominated assets. This confirms my view that the Chinese are not significant buyers of U.S. debt. I believe the Chinese central bank is not adding U.S. Treasury bills and bonds to their holdings; they are simply rolling over and/or reducing their existing holdings.
Gold/Silver Mining Stocks & Funds have been overly weak in the past six months, as compared to the increase in the physical metal. Speculation has been that the ETFs have taken away the demand, however, I have felt there is another reason. Recent statements from Bolivia and Peru make me think it’s the fear of nationalization of mining properties, or workers demanding higher wages and benefits.
I’ll be providing more information on this issue in next Monday’s Weekly Precious Metal and Rare Coin Report. http://www.mintstategold.com/investor-education/cat/markets/
Silver closed today at $37.15 an ounce, up $0.25 on light trading. We are seeing Silver investor demand increasing globally as it shows excellent stability at these price levels. As we approach the summer months, I believe premiums on silver investment products should come down to encourage sales. Many new investors see Silver as ‘Gold’s cheaper cousin’ and an excellent way to store value without paying over $1,500 an ounce.
Strong upward price movement in the Palladium Market recently is very supportive for the entire precious metal group, as demand for Palladium has been increasing by the auto makers. Palladium has broken out above $800 an ounce.
Today’s Other Important News:
German factory orders rose an unexpectedly strong 2.8% in April, exceeding forecasts for a 1.9% rise.
A separate report said euro-zone retail sales climbed 0.9% in April, compared with economists’ forecast for a 0.3% increase.
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