Daily Market Report 02/08/12

GOLD

During overnight trading in Asia and Europe we saw some price resistance for Gold over $1,750 per ounce. About the time news came out of Greece having a delay in any settlement with its debt holders and on the terms of the ECU Bailout, causing some profit taking in Gold and the Euro.  Gold has shown excellent support above $1,700 and a short pause to consolidate gains is appropriate. At 11am PDT, Gold is down $12.40, trading at $1,735.70 per ounce on an average volume of trades.   

Yesterday’s $25  rally in Gold  is attributed to Fed Chairman Ben Bernanke telling the U.S. Senate Tuesday morning that despite last Friday’s stronger-than-expected U.S. jobs report, the U.S. economy remains overall weaker than many realize. That remark helped to sink the U.S. dollar index and rally gold and silver, on notions the Fed will continue have a very accommodative monetary policy

Reuter’s reports that at a recent FBI press conference a few eyebrows raised after they reportedly classified Gold standard believers as anti-government. “These extremists, sometimes known as ’sovereign citizens’, believe they can live outside any type of government authority. The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the Gold standard”, Reuters reports the FBI as saying.

As my reader know a Gold Standard simply means the convertibility of the currency (US Dollar) into gold. The US had gone off the gold standard on August 15, 1971. With the US debt on the way to $16 trillion, many investors and presidential candidates have been attributing the excessive debt buildup to the shift away from the gold standard.

SILVER

At 11am PDT, Silver is trading at $33.92, down $0.43 per ounce on moderate volume. With a predicted 7% expansion in global demand in 2012 to an unprecedented 968 million ounces, investors in India are using silver as an inflation hedge hoping that demand will be sustained by global concerns.