Daily Market Update 10/03/11

GOLD

Gold is trading higher today, for the third day in a row. Most of the news that drove gold higher was centered around the Greek debt crisis. This morning Greece warned that it would miss the deficit targets set by the IMF and ECU required to avoid bankruptcy. European buyers sold equities on the domestic markets and moved into safety of gold. At 11am PDT gold is trading at $1,652.70, up $24.10 in active trading. It’s an interesting day with gold up $24, while most of the gold and silver mining stocks are lower. The divergence between the physical gold prices on mining equities continues.

Today, UBS Bank lowered its year end average spot price for gold to $1,950 a troy ounce. London’s Daily Telegraph reported today that the Qatari wealth fund plans a $10 billion gold buying spree for the countries sovereign wealth fund.

SILVER

Silver is trading to build a support base at $30 per ounce. Overnight trading showed excellent demand, as a brief trip to $29.93 per ounce was met with enough demand to drive the market to $31.33 at one point before we saw profit taking. The volume of trading is average and the lack of sellers is causing the floor traders to go long on dips. Right now at 11am PDT, Silver is up $0.56 (1.8%) trading at $30.71 per ounce.

Other Important news that affects precious metal prices:

The Institute for Supply Management’s manufacturing (ISM Index) picked up a bit in September, rising to 51.6% from a 50.6% reading in August. The Commerce Department reported today that U.S. construction projects rose 1.4% in August on public and private spending gains. This was higher than most economists had expected.

Starting today, at 5:06pm PDT, I will be providing the Gold & Silver Minute on KFWB. KFWB News Talk 980 is the CBS affiliate for the Southern California area, and can also be heard on the internet at http://losangeles.cbslocal.com/station/kfwb-news-talk-980/.