Daily Market Update 5/18/11

| May 18 2011

GOLD
Gold was up $9.70 an ounce today, closing the day’s trading at $1,494.10 on average volume. Gold did benefit from increased buying overnight in India and China, supported by higher Crude Oil and equities prices in the world’s financial markets.

SILVER
Silver ended the day’s trading at $35.02, up $1.06 an ounce and above that important $35 barrier. Legendary investor Eric Sprott was interviewed on the Keiser Report on the RT cable news network, where he explained the strong possibility that the recent downward move of the silver price was caused by a coordinated ’raid’ on the COMEX future markets while all major markets were closed.

Read the article at http://www.mintstategold.com/investor-education/silver_prices_eric_sprott/

My 24 page research study on Hyperinflation is completed and now available. After three months of research I am proud to share the information with clients and friends. The title of the booklet is “U.S. Hyperinflation is Coming Soon, will Gold Confiscation or a Gold Standard be Far Behind?”

For a free copy of the booklet just email [email protected]

A look at the Big Picture...

The Euro is weak versus the Dollar, based on concerns that we could see a default on Greek debt. So, there is movement out of the Euros and into Dollar-denominated U.S. treasuries, driving down yield (interest rates). Decreasing Domestic interest rates’ is considered to be deflationary, and with QE2 coming to an end there is fear that the commodity prices will drop. Therefore, with the exception of today, we have seen a selloff in commodities ranging from Crude Oil to Sugar. Also, with Silver’s dramatic correction over the past three weeks we have seen the entire precious metal group sell off from the recent highs. The rhetoric coming out of Washington over raising the Budget celling is just adding fuel to the ’deflation’ fire. The reality of a 2 Trillion budget cut in entitlements (with an election year coming up!) isn’t possible, and most politically astute analysts realize it’s never going to happen.

What is the best strategy for precious metal investors? Add to your position. The fundamentals haven’t changed and the medium to long term outlook for Gold and Silver continue to look bullish.

The billionaire media war is interesting to follow. George Soros stated that he has sold 99% (or $680 million worth) of his gold holding, while John Paulson, whose Management Company is 4x larger than Soros, owns $4.5 Billion in gold and is buying more. Both men are experts at playing the media to gain support for the direction of the market.

Read between the lines of the article at http://www.mintstategold.com/investor-education/paulson_gold/

And make sure to email [email protected] for your free copy of the Hyperinflation Study.

Barry

Today’s Other Important News

The Federal Reserve April meeting minutes were released today, showing officials are divided about the timing of when to start to tighten monetary policy. Plus a QE3 could happen if there was a significant change in the economic outlook.
U.S. factory output slipped for the first time in 10 months in April while we saw a sharp drop in US house construction. The number of houses built in April fell 10.6 per cent from the previous month, according to the US Department of Commerce, as oversupply sapped demand for new buildings. The economy got off to a weak start in the second quarter.
The Crude oil price moved higher today as an Energy Department report showed an unexpected drop in U.S. inventories as refineries bolstered operating rates and imports declined.

For many of my clients and friends who are Gold & Silver addicts, I am now also posting additional market news and developments on Twitter.