Daily Market Update 2/17/11

The news of continued Middle East and North Africa protests in Algeria, Bahrain, Yemen, Syria, Libya, Oman, and Iran, have increased demand for all precious metals. The World Gold Council (WGC) said today that Gold demand for 2010 reached a ten year high, with demand hitting 3,812.2 tonnes, worth approximately US$150 billion. WGC also stated that the changes in central bank policy towards gold meant that in 2010 central banks became net buyers of gold for the first time in 21 years.

This morning the CPI Index rose by .4 percent as expected, and precious metal markets are moving higher on the back of this as gasoline and food prices continue to rise.

Gold closed at $1,383.50 an ounce, up $8.50 on good volume trading, while Silver closed at $31.50, up $0.85 at a new 30 year high. Silver is in a three-week-old uptrend and the next upside price objective is $35.00 an ounce, a major resistance level on technical charts.

VERY IMPORTANT TESTIMONY

After President Obama released his new $3.7 Trillion budget on Monday --- which forecasts deficits for 2011 at $1.6 trillion and $1.1 trillion for 2012 --- his budget director, Jacob Lew, gave testimony to the Senate Budget Committee on Tuesday. During the Senate Budget Committee hearing, Rep. Mick Mulvaney of South Carolina’s 5^th district points out: “These numbers just aren’t realistic” and “It’s not a credible document.” Rep. Mulvaney questioned the assumptions that the revenues and growth in the budget forecasts were based on. In short, as massive as the budget numbers are, it’s still hiding the reality of its size and scope.

It is important that you read the testimony at http://www.mintstategold.com/investor-education/senate_hearing/