Mid-Day Gold & Silver Market Report – 5/4/2011

Ryan Schwimmer

5/4/2011 12:06:00 PM

MEXICO, RUSSIA, THAILAND COMBINE FOR $6 BILLION GOLD PURCHASES

“Central banks have good reason to buy gold,” said Peter Morici, a former economic advisor to the U.S. government and current professor of business at the University of Maryland.  He went on to add that budget and debt issues mean that central banks should continue to be net buyers of gold.  Mexico bought 93.3 metric tons since January (previously, they held only 6.9 tons according to IMF data).  Russia added 18.8 tons (and now have a total of 811.1 tons), while Thailand added 9.3 tons (total 108.9 tons) all in March alone.

Morici also added, “The dollar is no longer a safe asset for backing currencies.  Treasuries are not a sound investment.”  The dollar is now at its lowest level in nearly two years (July 2008).  An independent ratings agency now says that the U.S. credit rating should be ‘C,’ which would be equivalent to a Triple-B on the S&P, who recently threatened to downgrade the credit rating of the U.S.  The President of Weiss ratings puts this in perspective: “It’s two notches above junk.”

At 12:05 PM (CT) the APMEX precious metals spot prices were:

• Gold:  $1,512.50 (down $29.40 on the day)
• Silver: $39.42 (down $3.23)
• Platinum: $1,827.20 (down $34.30)
• Palladium: $749.80 (down $34.60)