Daily Market Report 4/30/13

GOLD

Today we are seeing Gold trade in a narrow price range with a weaker dollar on prospects of further monetary easing in the United States and Europe. Weak US growth data has raised expectations the Federal Reserve will keep its bond buying at $85 billion a month, while the European Central Bank (ECB) is widely expected to announce an interest rate cut when it meets on Thursday. Current economic conditions in Japan, China and Europe are causing concerns about asset deflation which are driving interest rates lower. China and Europe are preparing for a new round of debt monetization to stimulate their economies. Although we are not currently seeing global inflation, history has shown us that hyperinflation is always preceded by massive asset deflation, forcing central banks and sovereign government to monetize far above desired risks.

At 11am PDT today, Gold is trading $1,472 per ounce, unchanged on average volume.

SILVER

I believe the main factor that has driven down the Silver price in April was contraction in China and Europe’s economy, leading to concerns of deflation. Silver prices would decline more than Gold during a period of global deflation, as would Silver prices increase at a faster pace in a inflationary environment. 

The U.S. Mint reported today that demand for U.S. Silver 1 ounce .999 Eagles has increased 161% in April:

• April 2012 1,520,000
• April 2013 3,975,500

Silver tested and held the $24 per ounce price level this morning. At 11am PDT Today, Silver is trading at $24.20 per ounce, down $0.07 per ounce on light volume.