Goldtrillion dollar bill
Gold closed trading at $1,037.20/oz. In euro and GBP terms gold is trading at €700/oz and £634/oz. Gold’s short term frothiness after sharp gains has led to profit taking and an expected correction back down to previous resistance at the $1,030/oz level.

Concerns regarding the sustainability of the recent recovery are increasing after yesterday’s poor consumer confidence number (and last week’s poor jobs and housing data). Concerns about the health of the US consumer and wider US economy are likely to lead to the dollar remaining under pressure in the medium and long term which bodes well for gold. As does the fact that there is a growing realisation that governments cannot print money forever. At some stage in the coming months, the extraordinary stimulus and debt monetization seen internationally will have to end and this may derail the fragile global economic recovery.

This week’s record issuance of US Treasuries (the greatest amount of debt ever sold in one week) will test international appetite for US debt. The net debt increase of $153 billion is so high it will exceed the current authorized federal debt limit of $12.1 trillion (upcoming vote to raise the federal debt ceiling to $13 trillion and this does not include the US’ massive unfunded liabilities of Medicare and Social Security). Support for gold will come from continuingly high oil prices and the dollar remaining under pressure and support is currently seen at $1,027.70/oz and resistance at $1,050.50/oz.

annual surplus and deficit

revenue transfers to social security and medicare

Silver
Silver is trading at $17.08/oz. In euro and GBP terms silver is trading at €11.23/oz and £10.17/oz.

Platinum Group Metals
Platinum is trading at $1,317/oz while rhodium and palladium are trading at $1,800/oz and $325/oz respectively.