Daily Market Update 03/06/12

GOLD

Well the bears won last night’s gold battle, taking gold down to as low as $1,661 per ounce before the buyers got aggressive. The world’s financial markets reaction to Greece threatening to default on any of its bondholders did the trick. Many Greek bondholders are publicly saying they do not plan to take part in this week’s €206bn debt swap, raising the pressure of a potential default. At 11am PST, the gold price has firmed up at $1,674 per ounce on a good volume of trades. The selling came on the CME, as Asian markets kept gold around the $1,700 area for most of the session.  I would expect to see bargain buying of gold and silver in Asia when it opens tonight.

Industrial and Commercial Bank of China Ltd, the world’s most valuable lender, said in a statement that its gold leasing business reached 62.8 tonnes of physical metal in 2011. The bank, which started gold leasing in January last year, has more than 100 clients, including jewelers, industrial users, refiners and miners, who borrow gold for up to a year. The bank charges a fee for the leased gold, which is returned within an agreed time period.  (I’ll explain why gold leasing is very bullish for the gold price and the benefits for lenders in the 3/12 Weekly Market Report)

SILVER

While today’s gold correction was less than 2%, silver dropped 3.25% on the same news. Silver is struggling to stay above the $33 per ounce level. At 11am PST, silver is trading at $32.95 per ounce, down $0.83 from yesterday.  The Silver Institute’s quarterly newsletter “Silver News” was just released.

To read a copy, click on

http://www.silverinstitute.org/site/wp-content/uploads/2012/03/SNFeb20124.pdf