Mint State Gold Daily Market Update 5/23/11

By Barry Stuppler –

Gold, closed at $1,515.80 an ounce, surprisingly up $.90 in the face of a strong U.S. dollar, on active trading.

The latest Greek debt problem has caused a strong dollar versus the Euro. This means that the Gold price is near an all-time high valued in Euros, while its lower valued in American Dollars. Take advantage of this opportunity. Because to quote CNBC’s Jim Cramer “Both the Dollar and the Euro are in a race to the bottom”.  Yes, the Obama administration and the Federal Reserve currently have a weak Dollar policy to help lower unemployment and stimulate economic growth before the 2012 elections.

Over the weekend the Greek restructuring plan was rejected by European Central Bank officials, raising the risk of debt default by Europe’s most-indebted nation and raising the value of the Dollar versus the Euro.  The Eurozone Central bankers are now threatening to deny Greek banks access to the ECB’s refinance operations after any restructuring. Cutting Greece off from ECB liquidity would constitute a dramatic escalation of the Eurozone debt crisis. It would force Greece out of the Eurozone within days. You could say that the ECB is threatening to create so much mayhem in the financial system that the monetary union would effectively collapse.

Before the Eurozone nations will bailout Greece, they want to see cuts in the budget and sales of state owned assets.  Greece holds 3.6 Million ounces of gold (worth $5 billion) and there is a possibility of a sale. There are at least 10 Central banks that are lined up to buy it. A sale of any Greek central bank Gold would be short term bearish, but long term very bullish. However, it is more likely that Greece would use the gold for a loan if there isn’t another alternative.

Silver, was down 26 cents today, closing at $35.02 an ounce. Silver traded in a $1.09 range from the highs to the lows of the day. The Shanghai Futures Exchange, China’s biggest commodities market, is expected to launch silver futures by the end of this year according to Yang Maijun, the head of the exchange.


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