Daily Market Update 4/27/11

GOLD
Gold closed today at $1,516.20, up $14.50 for the day on heavy volume.

SILVER
Silver also traded amidst heavy volume and closed at $46.10, up a net $ .86 cents on the day.

We are awaiting the Bernanke statement and after Bernanke speaks today we expect to see volatility in the market.

I’m at the CNSA Coin Convention in Chicago with many of my fellow dealers, many of which I’ve known for over 30 years. The main topic of conversation is the Gold and Silver Markets. The metal that has amazed most of us is Gold, not Silver. Silver dropped from its high of $49.82 to $44.62 (10.4%) in 30 hours on profit taking, yet Gold did not close under $1,500... WOW. After Silver had moved from $30 to almost $50 an ounce without any serious profit taking, most professionals thought we would see a dramatic correction someday. Gold should have dropped at least to $1,450 (which would have been less than 5%) but heavy institutional buying wasn’t going to let it happen. This veritable "Flash Crash" in silver should serve as a reminder, especially to new buyers that Silver investing has far more volatility than gold. Balance your investment strategy, stay long term, and own both Gold and Silver.

The Show just started yesterday, but it is clear that demand for U.S. Morgan and Peace Silver Dollars is far stronger than the limited supplies on the trading floor. I’ll provide more updates on the rare coin market as the show continues.

Today’s Other Important News
Standard & Poor’s has downgraded its outlook for Japan’s sovereign debt from “stable” to “negative,” citing concerns that reconstruction costs following the March 11 disaster would increase Japan’s fiscal deficits. The rating agency cited concerns that the Japanese government would face difficulty providing a clear plan for paying for reconstruction, which S&P estimates as ranging from Y20,000bn ($245bn) to Y50,000bn. “The negative outlook signals that a downgrade is possible if Japan’s public finances weaken further over the next two years in the absence of fiscal consolidation to offset them,” S&P said.

For many of my clients and friends who are Gold & Silver addicts, I am now posting on Twitter multiple times during the day and night.