Morning Gold & Silver Market Report – 5/5/2011
Peter LaTona
5/5/2011 8:24:00 AM
JOBS REPORT = MORE BAD NEWS FOR ECONOMIC RECOVERY – The number of US claims for unemployment was expected to drop 19,000 this week, but instead rose by 43,000 to 474,000. This is the highest level in eight months. The four-week moving average for jobless claims, considered the better trend measurement, rose 22,250 and is now over 400,000 to 431,250…the highest since November.
The CME Group announced late Wednesday, that they are raising silver margin requirements for the 4th time in two weeks. These hikes are an effort to manage risks and this quick 84% increase is shaking speculators out of the market. The price of silver has dropped sharply, but is expected to level on the view of the long term investor.
As expected, The Bank of England held interest rates at a record low of 0.5%. A majority of their policy makers felt that the economic recovery is losing momentum and this overrides any inflationary concerns.
It was revealed yesterday the Mexico’s Central Bank purchased nearly 100 tons of gold bullion in recent months, their largest purchases ever. Central banks became net buyers of gold in 2010 after 20 years of net selling. Factoring in Mexico’s recent purchase with other central banks and “official sector” buyers, collectively they are on pace to record the largest purchase of gold since the collapse of the Bretton Woods system in 1971. The Bretton Woods system required the dollar to be backed up by gold.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,505.70 (down $11.70)
- Silver price - $37.71 (down $1.74)
- Platinum price - $1,805.00 (down $22.30)
- Palladium price - $729.20 - (down $19.50)
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies
