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Gold and silver are flat in US
dollars but higher in euros this morning. Trade is
thin with the UK and US markets closed for spring holidays. Gold and silver
were 1.75% and 8% higher last week and the precious metals and especially
gold appear to be on solid footing due to the continuing debt crisis in
Europe and concerns about a slowdown in the US and global economy.
Cross Currency Rates
Despite gold being only some 2% away
from the record nominal highs seen at the end of April ($1,563.70/oz),
sentiment remains lackluster at best with little or no coverage of gold in
the international financial press and media over the weekend.
Gold Bullion in US
Dollars – 60 Days (Daily)
Speculative sentiment remains highly muted with the investment public not
participating in the gold market. Indeed, the majority of the public’s
only experience of the gold market is when they have imprudently sold their
gold jewellery to the thousands of new cash for
gold merchants seen globally.
There are a tiny minority of more
risk averse individuals and people who understand the importance of gold as a
form of financial protection who continue to allocate funds to gold.
In the last two weeks we have
experienced a lot of sell orders and the ratio of sell to buy orders has been
the highest since our foundation in 2003. Value buyers emerged last week but
much of the buying was by existing clients adding to their holdings.
The threat of sovereign default and
contagion increases by the day.
Greece is facing the threat of
further severe austerity measures and a plan for unprecedented outside
intervention including in the collection of tax and wholesale privatization
of Greek state assets. The severity of the plan and the fact that it would in
effect spell the end of Greek sovereignty and a forced move towards a
European fiscal union may lead to its rejection by opposition Greek parties
who may seek a fairer alternative.
Portugal Government 10
Year Note – 2 Years (Daily)
Greece is just one of the sovereign debt crisis facing the Eurozone. Portugal and Ireland are bracing for debt
crisis contagion to reach their shores and in both countries the crisis is
deepening.
Portuguese bonds have come under
heavy selling pressure again this morning with 10 year bonds rising to 9.822%
and two-year note yields were 21 basis points higher at 11.53% this morning.
The spread or yield difference between German 10-year bunds and Portuguese
securities of a similar maturity widened to a record over 678 basis points in
London this morning. This is the highest since Bloomberg began collecting the
data in 1997.
Ireland Government
Bond – 10 Year (Daily)
In Ireland, Transport Minister Leo Varadkar sparked
alarm and confusion over the weekend when he said the government may need
further funding from the European Union and IMF next year as Ireland will be
shut out of bond markets for 2012 and possibly even in 2013.
Irish 10 year bond yields surged over
11% last week and remain over 11% at 11.07% this morning.
Punitive “bail outs” have
clearly not worked and have simply managed to transfer massive debts from
profligate banks to western nations taxpayers who were already struggling
with very high debt levels.
A continuation of these misguided
policies makes a second more dangerous phase of the global debt crisis
increasingly likely and means that diversification into gold remains prudent
and safe haven demand for gold will remain robust for the foreseeable
future.
Gold
Gold is trading at $1,536.10/oz,
€1,075.62/oz and £932.95oz.
Silver
Silver is trading at $37.97/oz,
€26.59/oz and £23.06/oz.
Platinum Group
Metals
Platinum is trading at $1,798.20oz,
palladium at $756/oz and rhodium at $2125/oz.
News
(Bloomberg) -- Silver
Futures Climb, Gold May Advance on Europe Debt, Inflation Concerns
http://www.bloomberg.com/news/2011-05-30/silv...-inflation.html
(MarketWatch) -- futures fall,
but silver moves higher
target="_blank" http://www.marketwatch.com/story/gold-futu...=MW_latest_news
(Reuters) -- Gold
steady on Greece debt fear, soft U.S. data
target="_blank"
http://uk.reuters.com/article/2011/05/3...E7GU01120110530
(Bloomberg) -- Euro
Weakens on Greek Debt Concerns < target="_blank"br>
http://www.bloomberg.com/news/2011-0...trengthens.html
Commentary
(ZeroHedge) -- The Greek "Ultimatum":
Bailout (For The Bankers) And (Loss Of) Sovereignty&nbs target="_blank"p;
http://www.zerohedge.com/article/...oss-sovereignty
(NY Times) -- Utah
Law Makes Coins Worth Their Weight in Gold (or Silver)& target="_blank"nbsp;
http://www.nytimes.com/2011/05.../us/30gold.html
(MarketOracle) -- Gold Going
Parabolic This Summ target="_blank"er
http://www.marketoracle.co....ticle28266.html
(Armstrong
Economics) -- The End of target="_blank" Time
http://www.10sigma.com/f...005-22-2011.pdf
(International
Business Times) -- Why gold demand is surging i target="_blank"n China?
http://www.ibtimes.co...d-us-dollar.htm
(True Economics) -- Dr Constantin Gurdgiev: A note on
my appointment to Gold target="_blank"Core
http://trueeconomics.blogspot.com/2011/05/280511-note-on-my-appointment-to.html
Mark O’Byrne
Goldcore
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