So far this week we have traded a very choppy and volatile $37.50 range. The weakness of the Gold market has been attributed to the U.S Dollar's strength. It appears this European Credit Crisis that has put an unbelievable strain on the Euro is not going away anytime soon.
We are all aware of Greece's budget debt and the vast and severe cuts the Greek Cabinet has ordained to receive help from the European Union Central Bank. However there is much more here than previously realized from the investment community. Not only was Greece 's fiscal problems worse than originally thought it has been revealed that Portugal , Ireland , Spain and Italy are having there own debt crisis. With this economic climate it is truly amazing the 'precious metals' have been able to maintain the $1100.00 level.
Also adding pressure to the precious metals inability to maintain or retain gains is the speculation regarding the Peoples Bank of China once again raising interest rates due to HIGHER than expected inflation in China . They have been sending mixed signals to the world regarding their appetite for Bullion. First they boast about building their reserves from 1500 metric tons to 10,000 metric tons over the next decade. Yet recently they have stated they will curtail their bullion imports to help slow their ever growing economy. Only time will tell what the worlds largest consumer will do.
Meanwhile the jewelers of India have been huge Bullion buyers in the Asian Gold market and have deemed it as "Bargain Hunting". The Indians have been buying price dips since early December. Indonesia and Viet Nam have also been buyers of bullion...
Jobless Claims dropped 6,000 to 462,000.
Unexpectedly the Trade Deficit dropped 6.6%.
Mike Daly is a gold specialist for PFG BEST: email@example.com.