Daily Market Update 10/20/11

GOLD

Gold had a wild ride last night, reaching $1,604 per ounce overnight on sizeable volume. At 11am PDT gold is trading at $1,611.10, down $34.80 per ounce in very active trading. Gold is at the low end of the recent $1,600 to $1,685 trading range, and looks attractive. The ongoing disagreements over the size of the EU Bailout fund and bank re-capitalization between Germany and France is causing the financial and precious metal market turbulence around the globe. There are major differences as to the best approach to stabilize the massive sovereign debt crisis and bank default problems between the ECB, Group of 20 and the IMF. Most market analysts are pessimistic on the possibility of a speedy solution to the problems. I would like to see a couple statesmen emerge with a workable plan from these European politicians and bureaucrats, or this problem could lead to a global recession.

GALLUP POLL

A recent Gallup telephone poll of over 1,000 adults showed that 34% of Americans believe gold is the best long-term investment. Real estate at 19% was a distant second, stocks & Mutual funds were third at 17%, while Bank savings account or CD was only 14%. Gold is Americans’ top pick as the best long-term investment regardless of gender, age, income level. Older, middle-income American men and Republicans are more attracted to Gold than are other Americans.

SILVER

Surprisingly, Silver’s price performance during this eurozone debt crisis is doing better than gold. Silver did break the psychological support $30 level briefly last night, but quickly rallied back. It appears that much of the seasonal demand from Asia is focused on Silver because of the attractive price compared to gold. Right now, at 11am PDT Silver is down $0.85, trading at $30.46 per ounce on heavy volume.