Daily Market Update 5/6/11

GOLD
Gold closed today at $1,485, up $3 on the day, however in the past 24 hours gold has traded from $1,462.50 to $1,497.70. It is widely felt by precious metal professionals that yesterday’s dramatic drop in the Gold price was overdone, and we saw heavy buying in the $1,480 area in Asia overnight. There is a commodity trader’s expression referring to an up-day after a sizeable drop called “A dead cat bounce”. The question of the day: "Is the rally in the precious metal markets a dead cat bounce, or is it the end of the decline?" I believe this is the end of the precious metal groups recent decline, especially in Gold. I was very surprised to see Gold dropping to $1,462. This was definitely an overreaction to the large correction in Silver.

SILVER
Silver looks like it bottomed out this morning at $33.05, ending the day’s session at $35.08, down $0.97 cent on the day. Silver remained on the defensive, although traders saw good Chinese buying overnight. The value of Silver should be positively affected by India’s seasonal buying, which we are entering. We will be seeing sizeable gold and silver buying by the Indian citizens very soon.

Today’s Other Important News

Brent crude, the oil benchmark, tumbled more than $10 a barrel on Thursday – its biggest fall in absolute terms – as investors bet that recent sharp gains in raw material prices would sap demand and compel emerging countries’ central banks to raise interest rates to head off runaway inflation.

The U.S. economy gained 244,000 jobs in April, the biggest increase in almost a year, but the nation’s unemployment rate rose to 9.0%, according to government data. Economists surveyed predicted a net gain of 175,000 jobs.

Tune in Saturday evening for my weekly radio show on Talk Radio 790 KABC in the Southern California area, or listen to www.kabc.com at 9pm PST to hear an extended program on Gold, Silver and precious metals. The show is live (not recorded), so you can call in with your comments or questions to 800-222-5222. Special guest this week is Heritage Auctions Director of Ancient Coins, David Michaels.

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.