Daily Market Update 3/22/11

GOLD

Gold closed at $1,428.10 per ounce today, up $1.10 for the day with a very narrow trading range of only $8.40. Gold has run into selling pressure at $1,430 per ounce, however, consolidation around the $1,410 to $1,430 range would be very healthy for the next Bull Run to $1,500 per ounce. The ongoing conflict in Libya along with rising tensions in Yemen, Bahrain and Syria are causing a rise crude oil prices and a weakening US Dollar, thus driving more buyers into precious metals.

Commerzbank stated “support for gold is coming from the weak US dollar and expectations that western central banks could use the events in Japan as justification for maintaining their ultra-loose monetary policy”. I believe that QE3 has a higher chance of being enacted during the summer months.

SILVER

Silver was up again closing at $36.20 per ounce, up $.28 cents today. Trading was normal with a very narrow trading range of only $.46 cents. Domestic and International demand for physical silver continues to grow.

Spokesperson for the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by market value, sold 418,000 ounces of physical silver to Chinese citizens in January, alone, compared with 1.06 million ounces for the whole of 2010. This, according to Zhou Ming, deputy head of the bank’s precious metals department. Other Chinese banks have been just as busy, since China was a net importer of over 100 million ounces of silver last year, whereas only a few years ago, the fast emerging superpower was exporting an equal amount annually.

Today’s Important News - Are we moving towards a Gold Standard?

Longtime gold standard advocate, Rep. Ron Paul, R-Texas, has scheduled an April 1 hearing of his U.S. House Subcommittee on Domestic Monetary Policy to examine the bullion programs at the U.S. Mint. Last week Paul introduced H.R. 1098, the Free Competition in Currency Act of 2011, which would repeal legal tender laws in order to prohibit taxation on gold, silver, platinum, palladium and rhodium bullion. The bill has been referred to the House Committees on Financial Services, Ways and Means, and Judiciary.

Utah’s House and Senate have passed the Sound Money Act (HB317) which would recognize gold and silver coins as legal tender and exempt them from certain state tax liability. Although the legislative session for Utah is over, Gov. Gary R. Herbert has until March 30 to veto the bill; if he does not, it automatically becomes law.