Daily Market Report 02/10/12

GOLD

Last night the leaders of Greece’s governing coalition pushed back against German demands for deeper budget cuts to get the bailout needed to prevent a financial collapse. The Greek parliament must, by Sunday, ratify the 130B bailout package agreed by Greece and the "troika" of the European Commission, the European Central Bank and the IMF. After this news was announced the Dollar rallied and gold and silver sold off.  At one point last night Gold hit $1,703.40 per ounce, held well and rallied back on good volume (Very Impressive). At 11am PDT, Gold is at $1,718.70, down $19.20 per ounce on better than average trading for a Friday.

China’s customer bureau reported today that January overseas exports decreased ½ percent from a year earlier while imports dropped 15.3%.  This caused a greater-than-forecast trade surplus of $27.3 Billion in January.  This trend is bullish for precious metals but bearish for global growth. 

An interesting story is unfolding in the Middle East.

Nicolas Karout, a gold dealer in Damascus, Syria reports his patrons have stopped spending their money on frivolous things such as gold bangles or a pair of earrings. Instead, he is seeing a roaring trade in gold British Sovereigns. "In the past 10 months I have sold more gold coins than my father and grandfather sold in their whole lives," he says with a laugh. "Syrians are not idiots, they know their interests and they know when there are security and economic problems they know the value of the paper money will decrease and they go to gold, which has always been a refuge."  Gold coins are ferreted away under a pillow or in a safe, far away from banks that may be the target of further sanctions or seizures. The Syrian pound exchange rate was 47 to the US dollar in March last year when the first protests against President Assad began. Now, the black market exchange rate is about 70 Syrian pounds to the dollar.I have heard similar reports from gold dealers in Iran and Egypt.

SILVER

Silver is still having difficult time clearing the $34 per ounce price level. Last night Silver tested support at $33 per ounce and bounced back with gold on excellent buying. Silver seems to be establishing a $33 - $34 trading range. At 11am PDT, Silver is down $0.48, trading at $33.54 per ounce on good volume.