Gold, Silver and USD Update – May 2nd, 2011



Gold

It was definitely a wild ride for gold and silver today. Gold started the day around $1550 and I personally would have been content with that price given the recent run up, a pause would have been a healthy thing. But just before noon gold took to touch $1575, something I don’t think anyone expected when trading started this morning. There also doesn’t seem to have been any particular reason for the move but leading up to the close it dropped back to close around $1555. In the aftermarket it is continuing to fall further to $1543, again no particular reason why that I can find. The Dec 2016 contracts also closed relatively flat at $1806.

Silver

Silver also had a wild ride today also, starting around $44 and running back up with gold to $47.20 and promptly moving back down again to close around $43.92 where as the Dec 2015 contracts closed at $42.67. so much for backwardation being done for. Unlike gold silver looks like the slide may be halting jump below $43, current price at $43.92.

There was a report out of Sprott Asset Management that they had liquidated some of their PSLV holdings in various Sprott funds to the tune of $35 million. See full zerohedge link here. I don’t think anyone could fault Sprott for taking some money (or silver) off the table but I don’t think Sprott is calling the top as zerohedge speculates on but maybe a local top. I won’t be surprised by some selling of bullion by Sprott personally and in his funds at some point. He has mentioned in a past Gold Report interview that he’d been selling gold bullion to move into silver equities but not yet at the point of selling silver bullion to move into silver equities but commented that that day could come. See link here from The Gold Report.

There was also speculation earlier on zerohedge that silver was down due to a China slowdown. See article here. If anything China was likely buying the dips in silver.

At the end of the day the silver margin once again increased, 12% this time. See here.

US Dollar

It looks like the Bin Laden news gave the USDX about 30 basis points but was eroded overnight and touched 72.72 mid-day. When gold and silver started to slide it has managed to recover somewhat to hold just above 73 at 73.06. I’m waiting for the day the USDX can’t hold near 73, which may not by far off, then things will get interesting as we test 72.

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