Morning Gold & Silver Market Report – 11/18/2011

Peter LaTona

11/18/2011 8:15:00 AM

GOLD PRICES MOVING UP ON DECLINING DOLLAR

Gold prices suffered a 3% decline yesterday, and Silver, Platinum and Palladium prices showed sharp drops, as well. Although there is little actual news coming out of the European debt crisis, there are plenty of opinions as to how this will unfold. Yesterday, the winds were pessimistic, so the Gold and equity markets suffered. Gold’s decline largely was due to the weakening of the euro, which triggered a strengthening of the U.S. dollar. Today, futures are gaining on rumors that the European Central Bank (ECB) might be willing to lend large amounts to the International Monetary Fund (IMF). As a result, the U.S. dollar is weakening again and pushing up Gold prices.

Yesterday, the U.S. debt crossed the $15 trillion mark. What does a trillion dollars look like? A trillion is 1 million multiplied by 1 million. It would be like having 1,000 billion dollar bills in your pocket. We should be even more concerned about this $15 trillion debt when we realize that the ratio of U.S. debt to its GDP is now 102% and rising. When the debt-to-GDP ratio of a country hits 90%, it begins to become a drag on future economic growth. If this ratio climbs to 100% or higher, economic growth becomes nearly impossible. Think of it as a large hole that keeps getting bigger. At some point, you just cannot fill it in fast enough.

At 8 a.m. (CST), the APMEX precious metals prices were:

• Gold price - $1,725.50 – Up $3.30.
• Silver price - $32.01 – Up $0.48.
• Platinum price - $1,596.00 – Up $14.90.
• Palladium price - $609.00 – Up $3.40.