GOLD
Up, Up, and Away… the Gold rally continues with gold trading at $1,532.10, up another $3.40 an ounce at 11am PDT. It’s becoming more and more clear that the primary issue driving gold prices both up and down is DEBT. Whether it is Euro Debt, Japanese Debt, or lifting the U.S. Debt ceiling, both the positive and the negative news affect the precious metal markets. President Obama’s comments today about the impasse on reaching an agreement on lifting the U.S. Debt ceiling rallied gold $5 per ounce. Remember, the 14.3 trillion debt ceiling needs to be raised 2.4 Trillion by Aug. 2nd to get us to the end of 2012, or the U.S. defaults on its debt, unless the Treasury Department can figure out an alternative.
The Chinese raised interest rates again for the fifth time in the past eight months. The issue is an overheated economy and rising inflation. With estimates of a 6% inflation rate, the Chinese are running to Gold and Silver. Originally, the feeling was that as prices of Gold and Silver increase, the Chinese/Indian demand would decline… WRONG. The concern about rising food and commodity inflation is increasing demand, regardless of the precious metal price.
SILVER
Silver has been showing more strength than Gold in the past two trading sessions. Silver is up $0.43 an ounce, trading at $36.53 at 11am PDT. It appears the U.S. Mint has caught up with the backlog, as premiums on U.S. 1oz Silver Eagles have come down to the levels at the start of the year. The San Francisco Mint is now striking Silver Eagles in an effort to satisfy the demand. From 1986 – 1992 San Francisco produced Silver Eagle Proofs. This is the first year since 1992 that San Francisco has produced Silver Eagles, and the first-time ever that San Francisco has produced Mint State Silver Eagles.
Today’s Other Important News:
The Labor Department reported today that applications for U.S. unemployment benefits fell by 14,000, to a seasonally adjusted 418,000 in the week ended July 2. Claims for the prior week were revised from an original reading of 428,000 up to 432,000. Economists surveyed by Market Watch had expected new requests for jobless benefits to drop to 424,000.
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