Mid-Day Gold & Silver Market Report – 2/17/2012
WHEN WILL GREEK BAILOUT FINALIZE? VOLATILITY ABOUNDS
Precious metals have been relatively volatile this morning, while technical selling by investors to recoup losses and hopes for a Greek debt resolution continue to influence the markets. Credit Suisse analyst Tom Kendall said, “There is enough risk around the European side of things to keep Gold supported above $1,700, but we are whipping back and forth on whatever the mood seems to be surrounding Greece.” George Gero, RBC Wealth Management senior vice president, reiterated those findings. He said, “Good economic numbers, better technicals as we added 7,000 contracts to Gold open interest … and more Greek news has added to the move up in Gold.”
Greek Prime Minister Lucas Papademos took time to call fellow heads of European nations to try to drum up support for the bailout measures to ward off any potentially crippling bankruptcy. Dutch Prime Minister Mark Rutte said he wanted to pursue those talks “to create a positive mood in view of Monday’s meeting and to dispel doubts that could thwart this agreement.” The question remains: Has Greece done enough? A drop from the current 160 percent debt-to-Gross Domestic Product (GDP) to 120 percent debt-to-GDP by 2020 has a lot of eurozone countries concerned. That is one of the agreement’s parameters. Austrian Finance Minister Maria Fekter said, “The skepticism is especially strong among the triple-A states over whether Greece will be able to make it. The risk of a Greek insolvency is not off the table.”
In a letter to investors, noted billionaire hedge fund manager John Paulson said, “By the time inflation becomes evident, Gold will probably have moved, which implies that now is the time to build a position in Gold.” The overall demand for the yellow metal increased to 4,067.1 tons in 2011, the most since 1997, according to the World Gold Council. Central banks also are expanding their bullion reserves, adding 439.7 tons last year -- the most in almost 50 years.
At 12:01 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,721.70 – Down $5.70.
- Silver - $33.26 – Down $0.18.
- Platinum - $1,633.80 – Up $6.70.
- Palladium - $688.00 – Down $9.60.