There has been plenty of news this week to help fuel this rally of the precious metals. The European Union had announced through a joint effort with the (IMF) International Monetary Fund they would assist Greece financially in an effort to help stabilize there economy. This action sent a boost of confidence to the Euro states and the Euro Dollar. The Euro gained some ground versus the U.S Dollar in turn making the appeal for Gold higher. However, the European States are far from being out of the woods as several other Euro states are thought to be having fiscal debt crises of their own including Portugal, Spain, Ireland and Italy. This scenario will continue to affect Gold. The recent U.S dollar weakness has enabled Greece to sell their debt in order to get their fiscal house in order. The weaker U.S Dollar has produced heavy Gold buying from the European States.
The ADP report also helped fuel the rally this week as they released data that indicated U.S companies unexpectedly CUT payrolls in the month of March. The prediction was for a GAIN of 40,000 jobs instead the report revealed a LOSS of 23,000. ADP basis its report from over 300,000 companies and 22 million payrolls.
U.S Jobless Claims decreased by 6,000 to 439,000 Americans filing for first time unemployment benefits, Since December 2007 over 8 million Americans have lost jobs.
The (WGC) World Gold Council announced the Chinese Gold production would run out in six years… They are the world’s largest producers of Gold and are having trouble supplying the over whelming demand from its citizens….
The demand from the Asian sector remains brisk. With the jewelers of India buying to meet the demand of a predicted one million weddings during the months of April and May. The brides of India wear gowns laced and covered in Gold ornaments. The gifts of choice presented to the wedding couple are also made of Gold. It is said that 12% of all gold ever refined is in the households of India….
The suicide bombing in Moscow earlier in the week that caused the death of 36 people also spurred Gold demand as investors appeal for hard assets heightens during international uncertainty. This is especially true in countries producing oil.
Silver traded $18.00 per ounce as it was aided by the Gold rally and the U.S Dollar weakness. So far this week Gold has made a two week high and flirted with the $1130.00 level. This level has proven extremely tough for Gold to maintain. A shutdown of a smelter in the world’s third largest platinum producer Lonmin has pushed platinum to its highest levels since August 2008 and palladium to its highest level since March 2008. Global demand for all precious metals is extraordinary.
HOWEVER: ALL THIS CAN CHANGE TOMORROW as the World investors wait to decipher tomorrows (FRIDAY April 2nd) UNEMPLOMENT DATA….This data will give the FOMC an indication on whether to RAISE or maintain the presently low interest rates….
Mike Daly / Gold Specialist