Daily Market Update 7/08/11

GOLD

Today’s disappointing U.S. jobs report, driving our employment rate to 9.2%, was negative for the U.S. Stock Market, but bullish for Gold which rallied $10.20, trading at $1,542.30 an ounce at 11am PDT. 

Why did gold rally on a poor Jobs report? Because, this news makes another round of quantitative easing far more likely. I will provide more information on how it affects our economic outlook in Monday’s Weekly Market Report email.

The idea of going back to a Gold Standard isn’t just an American idea. Later this year, the Swiss Parliament is expected to discuss the creation of a Swiss Gold Franc — a parallel currency to the official Swiss Franc — raising the possibility that the country --- one of the last to abandon the gold standard --- may soon take a big step toward returning to it. Switzerland still holds a large amount of the precious metal. According to World Gold Council figures, the Swiss hold 1,040 tons of gold, worth about $46 billion, which is almost as much as China.

SILVER

Silver is up another $0.10 per ounce, trading at $36.63 at 11am PDT on light pre-weekend trading.

Another World Mint reports seeing record demand for Silver. Great Britain’s Royal Mint, established in the 13th century, makes Britannia silver bullion coins and other collector silver coins. The Royal Mint has doubled their consumption of Silver from the same period last year, consuming 324,421 ounces of Silver in the first-half of 2011. 

Today’s Other Important News:

U.S. Payrolls Rise 18,000; Jobless Rate Hits 9.2%
In June, American employers added jobs at the slowest pace in nine months --- while the unemployment rate unexpectedly climbed to 9.2%. This news sent global stocks tumbling on concerns that the world’s biggest economy is faltering.

Marketing Director Ved Prakash of India’s state-owned trading company Minerals and Metals Trading Corporation (MMTC) told reporters, "We plan to import 350 tons of gold and 1,200 tons of silver in the 2011-12 fiscal year as domestic demand for these metals is fast rising,"  India is one of the largest importers and consumers of gold and silver in the world. As the domestic production of these precious metals is negligible compared to their rising consumption, India has been importing hundreds of tons of gold and silver every year.