One of the two recently announced platinum ETFs launched today in London and is experiencing some very positive investor interest. The second Platinum ETF, on the Swiss bourse, is set to launch some time before May 10th. Again, time will tell how these two ETFs impact the market. One thing that is certain, this will be a new impact on the demand side of the market that platinum (and palladium) have not previously experienced.
ECB gold sales have been updated for the past week and again we've seen another week of massive sale increases. Two ECB banks sold 17 tonnes of gold into the market over the past week. In the last five weeks, ECB banks have dumped over 76 tonnes of gold into the market, a drastic change from sales levels over the previous six months. There is only one time in the last two years there has been this high a level of gold sales into the market in such a short period of time. The last time the gold market saw these levels of sales was May of '06 when prices peeled off of $730 and fell back to $550 over the length of the sales. Gold has increased $50 per ounce in the face of this supply increase. We will continue to harp on this issue because it is the clearest indicator of the robust physical demand currently in the marketplace. We believe once these sales moderate that the $700 will be a given…in fact, it is our belief that these sales are the only reason we haven't seen that level yet.
Two US government reports are due out at 10 AM EST that could push the dollar index around considerably if numbers come in drastically different than expectations. The April Consumer Confidence index and March existing home sales should give a good reading on the health of the economy while we wait to see some initial US GDP figures on Friday morning and durable goods figures tomorrow.
Precious metals are going to be data dependent this week with some market moving reports out from the US government. One thing to keep an eye on however are the trades just before the contract expiration for silver on Wednesday. Silver will roll forward to a new month contract that day and there could be some significant price activity before and after, as traders jockey for position into the front month contract.
Blanchard and Company, Inc. is the largest and most respected retailer of American rare coins and precious metals in the United States, serving more than 450,000 people with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and platinum bullion. The Blanchard Economic Research Unit is a key source of precious metals market analysis and continues to be an important resource for financial and consumer media throughout the United States. Blanchard and its predecessor companies have called the New Orleans area home for more than 30 years. For more information about the company, visit BlanchardGold.com or call the company toll free at 1-800-880-4653.
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