Daily Market Update 5/20/11

| May 20 2011

GOLD
Gold rallied sharply today, closing at $1,514.90, up $20.20 an ounce on high volume for a Friday.

I can think of at least 20 reasons you need to build up your gold holding right now, but the #1 reason is that the World Governments Central banks are dumping U.S. Dollars and Securities and aggressively purchasing gold to build up their national reserves. During my research for my Hyperinflation white paper (which is now available – see below) I saw similar dumping of currencies by governments when a country appeared to be heading into a serious inflationary period. History does repeat itself.

Central banks are in a ‘gold rush’ to lower their U.S. Dollar reserves. Mexico, Russia and Thailand added gold, now valued at about 6 billion US dollars, to their reserves in the first quarter of 2011. As Gold prices advanced to a record highs, the US dollar and US Treasuries are being dumped to finance the purchase. These nations join India, Sri Lanka, Mauritius, Bangladesh, China, and Brazil who have publicly announced adding Gold to their reserves in the past two years. No central bank has sold gold since 2009. See complete story www.mintstategold.com/investor-education/central_banks_gold_rush/

SILVER
Silver closed up $0.22, at $35.28 per ounce today, on active trading. It appears that Silver has found the price support at $34, which was needed to turn it bullish again. Gold has taken the lead in the precious metal sector. After 3 months of Silver setting the direction of the markets, gold has resumed the leadership role. Silver followed gold higher today as the danger of a Greek debt default is driving fresh safe-haven buying into Gold & Silver.

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]

Today’s Other Important News

China has overtaken India to become the largest market for gold bars and coins in the first quarter of this year. A rising inflation rate has inspired a surge in bullion demand by Chinese investors. Imports of gold into China, the world’s top miner of gold, have risen more than four-fold to 245 tonnes last year, and in the first four months of this year, imports have exceeded 200 tonnes.
Data from the Russian central bank showed official gold reserves rise 400,000 ounces in April, to 26.5 million ounces or 824.2 tonnes. The bank has added nearly one million ounces in the first three months of the year, following last year’s record increase of 4.5 million ounces, as central banks continue to diversify their assets into gold.
The World Bank expects the US dollar to lose its solitary dominance in the global economy by 2025, as the euro and the renminbi establish themselves on an equal footing in a new “multi-currency” monetary system. The shift will be driven by the increasing power and strength of emerging market economies, with six countries – Brazil, China, India, Indonesia, Russia and South Korea – accounting for more than half of global growth in 14 years.

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.

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