This week thus far we have traded a $43.00 range in the Comex Gold Market. This range has been primarily due to the U.S Dollars performance versus the struggling European Union and the Euro. It has become apparent the situation in Europe is much worse than previously reported. It is my opinion that investors are looking to get away from the day to day speculation ratio between the Dollar and the Euro and are seeing safer havens. (precious metals).
So far this week has revealed more bad news regarding the U.S Economy.
Consumer Confidence has dropped to its lowest level since April 2009... This certainly indicates a lack of confidence by the American consumer as the are convinced the economy will be slow to rebound.
- New Home Sales Dropped 11%....
- Projections show 3 Million Homes will be reach foreclosure in 2010.
- The U.S Labor Department reported that Initial Jobless Claims rose by 22,000... (496,000)...MUCH WORSE than expected. Economists were expecting a decline... (460,000)
- A Gallup - Poll reported 19.9% (30 Million) of American workers are UNDER employed
- FOMC Chairman Ben Bernanke has stated that KEY U.S Interest Rates will remain low...
The Precious metals have been supported through strong physical demand throughout the Asian sector as they are buying the price dips ...deeming it as "Bargain Hunting"...
The Chinese recently stated they were NOT interested in buying the remaining IMF Gold at these levels..... Are these the same Chinese who have boasted to the world that they will take their current 1500 metric tons status up to the10, 000 metric ton level in 10 years?
The Chinese posses a lot of U.S Dollars! They are using television promotions to educate their citizens to purchase Gold and Silver as a hedge against pending Inflation to help protect their new found wealth....The Peoples Bank of China has raised rates twice this month...stating they were not going to continue being the lending source for the Globe.
Mike Daly is a gold specialist for PFG BEST: mdaly@pfgbest.com.
