Daily Market Update 5/13/11

GOLD
Gold closed today at $1,494.20, down $8.10 an ounce for the day on light trading. Look for a test of the $1,500 area in Asia on Monday, based on the direction of the US dollar.

The two issues that are effecting the movement in the Gold market today are:

    * the strength or weakness of the US Dollar, finally closing near the highs of the day at $1.40 to the euro
    * the Eurozone debt issues

Greece, Ireland, and Portugal, the euro region countries that needed 256 billion euros ($366 billion) in emergency aid to avoid default, may all see their debt loads exceed the size of their economies this year. Greece’s debt, already the biggest in the euro’s history at 143% of gross domestic product last year, will jump to almost 158% this year and 166% in 2012, the European Commission said today in Brussels. Portuguese debt will surpass total economic output for the first time this year, growing to 101.7% of GDP, while Irish debt will reach 112%.



SILVER
Silver strengthened in choppy trading in Asia overnight, closing in the US at $35.30 an ounce, up $0.73 for the day. Silver needs to find support above $35 on Monday trading or we will probably test the lows again. Investor demand for Physical silver continues to
grow. Premiums and delivery on 1oz US .999 Silver eagles and 1st quality .999 Silver trade units are delayed up to 6 weeks.  The U.S. Mint is producing Silver eagles 24/7 and cannot keep up with demand.  The Silver futures market is in backwardation, confirmation of the heavy demand.



Today's Other Important News

    * The Shanghai Gold Exchange (SGE) will cut silver margin requirements back to 18% from 19% from May 13 settlements if there is no sharp movement in prices, it said on Friday.
    * Inflation concerns is a major focus of the People's Bank of China, who announcement that in an effort to slow down economic growth they will raise the banking reserve ratio 0.5 percentage points to a record 21% from next week. The announcement came after the release of core inflation data earlier this week showed growth of 5.3%, down from 5.4% in March.
    * Platinum, which fell to a six-week low of $1,750 in the previous session, rebounded along with the rest of the complex. It last traded at $1,765. Palladium comfortably regained the $700 mark - it fell to to $715 yesterday, its worst low since the March 17th low of  $697.50.
    * The U.S. Labor Department reported today that U.S. consumer prices rose a seasonally adjusted 0.4% in April, led by higher gasoline costs.



Tune in Saturday evening for my weekly radio show on Talk Radio 790 KABC in the Southern California area, or listen to www.kabc.com at 9pm PST to hear an extended program on Gold, Silver and precious metals. The show is live (not recorded), so you can call in with your comments or questions (800) 222-5222. Special guest this week is Matt Federgreen, one of the owners of Beverly Hills Baseball Card Shop.