Daily Bullion Market Update 10/06/11

By Barry Stuppler – MintStateGold.com


QE (Quantitative Easing) is in the news today as both the Bank of England and the ECB announce sizeable quantitative easing programs to re-capitalize banks. The programs are very similar to the U.S. TARP program of 2008, to build up the financial strength of the banks ahead of any major debt default. The announcements pushed gold up $8.10 per ounce, trading at $1,648.30 per ounce at 11am PDT. Gold should find additional support from physical consumption from India, ahead of Diwali, the Hindu festival of lights, which starts on October 26th.


Silver is up $1.48 per ounce today, trading at $31.88 on heavy demand and high volume. As I have stated in the past the Silver price is a big beneficiary of positive announcements on quantitative easing (QE) programs. The reason being, this type QE program will help banks stay solvent even if we have debt default. Plus, QE programs normally help avoid recessions and ultimately cause future inflation, therefore, silver is up almost 5% today.

U.S. Silver Eagles are still flying off the shelves

With sales of 4,460,500 coins last month, American Silver Eagle bullion coins set U.S. Mint records as the second best month ever, for Silver Eagle sales. September 2011 ranks just behind January 2011’s all-time record sales of 6,422,000 Silver Eagle coins. It is anticipated that 2011 will be the best year ever for the Silver Eagle bullion coins, as the first 9 months of 2011 is just 1,251,000 Silver Eagles short of the 2010 record sales of 34,662,500 bullion coins.

The fact that the U.S. mint sold 4,460,500 Silver Eagles in September, as the Silver market dropped over 30%, is very impressive. Normally when you have a major sell off in gold or silver, a substantial portion of investors panic and sell. However, it appears that the past 10 years have taught precious metal investors to buy on corrections.

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