Daily Market Report 7/26/12

GOLD

Gold rallied today on comments from Mario Draghi (President of European Central Bank) at an investor conference raised hopes that Europe’s central bank might intervene in markets to bring down the cripplingly high borrowing costs for financially strapped European countries like Spain and Italy. At 11am PDT, Gold is up $6, trading at $1,615 per ounce with above average volume.

Yesterday Gold closed at $1,608 per ounce, last year on the same day Gold closed at $1,612. Last year within one month after July 25th Gold increased over $300 per ounce from the $1,612 price. Normally, during the summer months the Gold price is relatively quiet, but with the global debt problem and central banks talking about adding monetary stimulus, I believe a major Gold rally in the summer is very possible. If Gold stays above $1,600 per ounce on Monday, July 30th, or breaks above $1,625 per ounce, we are off and running.   

In the first five months of 2012, at least 315 tons (10.1 million ounces) of Gold had been imported into China. This quantity exceeds one-third of all global newly mined supplies during that time. The actual quantity is almost certainly higher as the Chinese government has a habit of not reporting all of the Gold it adds to its reserves until several years later. (This information was provided by Patrick Heller, a good friend). For more information on increasing Chinese demand, please read Pat’s complete article at: http://www.mintstateGold.com/investor-education/physical_Gold_shortage/

SILVER

Although Silver is not the main focus of investor’s attention, it is staying above the $27 per ounce level. I believe when a substantial monetary stimulus is officially announced by Europe, Asia or the U.S., Federal Reserve we will see a major rally in Silver. At 11am PDT, Silver is trading at $27.51, unchanged from yesterday.