Daily Market Update 6/01/11

GOLD
Gold was up $10.20 today, closing at $1,546.80 an ounce on very active trading. The Dollar is still in a race to the bottom with the Euro, and the Congressional fight over the U.S. Debt ceiling is acting as an accelerant. Economic news of a disappointing jobs picture in the U.S,. and a negative manufacturing reading, just added more fuel to the fire and provide even more reasons to own gold. With negative economic data coming out last month and again today, the Dow is now down over 200 points. I believe QE3 is on the horizon and my inflation predictions in the 24 page study are right on course. If you haven’t already read the study, please visit www.coinmag.com or contact me.

BEIJING - China National Gold Group Corp, the State-owned company that controls China’s largest gold deposits, wants to make global mining company acquisitions as they expect bullion to trade at near record levels for the next three years. The value of the announced gold deals so far this year stand at $16.8 billion, more than the totals for the entire year in 2008 and 2009, according to data compiled by Bloomberg

Over the past ten years there has been a debate as to whether ’physical gold’ or ’gold equities’ were the best way to profit from gold ownership. Recent history has shown us that the best gold investments are physical gold coins, as opposed to gold mining stocks or funds. You can read the complete article that addresses this issue by clicking the link below. I disagree with the author of the article, but I wanted you to hear his arguments.

http://www.mintstategold.com/investor-education/bullion_gold_stock_disconnect/

I believe the real problem could be the risks of higher labor cost and higher royalty payments to countries where the mines are located. Many of the mining companies negotiated their contracts when gold was only $300 an ounce, and the countries are only receiving $5 to $10 an ounce, while workers are receiving a minimum wage. Labor unions in many of these undeveloped countries are starting to make demands and threating to strike. Leaders of the countries (like Bolivia) are talking about nationalizing the mines if the royalties aren’t increased dramatically.

SILVER
Silver closed today at $38.02, down $0.19 cents per ounce for the day’s trading on heavy volume. Silver is trading in a $1 price range, showing good support at $37.20 and resistance at $39.00. Physical demand is slowing down for the summer months, and the U.S. mint is catching up with the backlog on Silver Eagles, only three weeks delayed.

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]

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