This week provide some strong and optimistic data relating to the U.S. economy especially in regards to U.S Jobless Claims. The Labor Department stated fewer Americans than expected filed for unemployment benefits citing an improvement in the Labor market. Jobless Claims dropped by 22.000 to 432,000 in the week ending 12/26/09.
This week the precious metals markets continued to trade in a sideways trend due primarily to light volume and disregarding technical fundamentals. The Gold has been clinging around the $1100.00 level As there has been “bargain hunter buying” primarily from the Asian sector.This is certainly no surprise considering the insatiable demand from China and India. There has been demand buying from the jewelry sector as well as investors anticipating a weaker U.S Dollar as an alternative investment.
China ranks sixth in the world in Gold holdings and continues to advise its citizens to purchase both Gold and Silver to protect their new found wealth. Last month China over took India as the worlds largest buyers of Gold.
This week has also focused on the Geo-political tension in the Middle-east after Al - Qaeda terror suspects attempted to blow up an Airplane destined for Detroit was foiled. This has shed light on Al-Qaeda cells in Yemen and their mission to attack America. There are reports of border skirmishes between Iraq and Iran over disputed oil territories. These Geo-political tensions certainly affect the Gold and Crude oil markets directly. Since (for the most part) both gold and Crude oil are “anti” U.S Dollar any threat to the flow of Crude oil will send investors flocking to the Gold market as a “safe haven” not to mention sending the price of Oil higher.
The huge rally of Gold and Silver prices this year has been directly linked to the U.S. Dollars inability to sustain and maintain investor confidence. With the current Geo-political environments look for that trend to continue.
GMAC inc. received its THIRD U.S bailout package $3.8 Billion
on top of the $13.5 Billion previously!!!
***HAPPY NEW YEAR**
Mike Daly /Gold Specialist