Daily Market Report 05/11/12

GOLD
The value of the U.S. Dollar versus the Euro is up for the 11th day in a row, based on the Spanish bank reforms and other Euro-zone sovereign debt problems.  A stronger U.S. Dollar means a lower Gold price as measured in the U.S. currency.  Earlier this morning, we saw Gold reach $1,572 per ounce (a four month low) based on liquidations to cover European credit and financial market losses. At 11am PDT, Gold is trading at $1,583.30, down $13.70 per ounce.

With gold trading at under $1,600 per ounce this week, there is exceptionally heavy volume of buying during the week on the world’s Gold markets. In June, we will learn which central banks were the buyers. I believe we are seeing a weak hands shake out (margin call and stop loss selling) ahead of a major rally in Gold.

SILVER
The Silver price continues to decline as it takes its lead from Gold. At one point this morning in Asia, Silver traded down to $28.41. Buying appeared late in the Asian trading and rolled into the European and U.S. markets. At 11am PDT, Silver is down $0.34, trading at $28.90 per ounce on normal weekend type volume.