Mid-Day Gold & Silver Market Report – 2/20/2012
GREEK RESOLUTION SEEMS A DONE DEAL, BUT GAPS WILL REMAIN
Precious metals prices continued to rally today on news that Greek debt resolution deal is almost a formality at this point. Consultant Paul Fertig reiterated that point, saying, “It seems today that eurozone finance ministers will approve the 130 billion-euro bailout package for Greece, and that should reduce fear in the financial markets and have a positive impact on the euro in particular. … The outlook (for Gold) remains positive if we get a solution to the Greek crisis.”
The Greek bailout deal seems to be a foregone conclusion at this point, with no economists or political parties expecting any hiccups. However, the bailout is not expected to resolve Greece’s problems. French Finance Minister Francois Baroin said, “We expect today the long period of uncertainty -- which was in the interest of neither the Greek economy nor the eurozone as a whole -- to end.” Finnish Finance Minister Jutta Urpilainen spoke of the hope to bring Greece out of its debt crisis, saying, “There are many open details. … A big issue is that we have to get Greece’s debt on a level that is sustainable and enables Greece to survive.” There are gaps in the financing, but not anything that would be seen as detrimental.
Some observers remarked that German Chancellor Angela Merkel is having her “Margaret Thatcher moment,” comparing her to the former British prime minister. The speculation is that a eurozone debt resolution would launch Merkel into a third term in office, matching Thatcher’s service in Great Britain. Merkel’s poll ratings have risen, and political economist Henrik Enderlein said, “She realizes that only with sticks, the European project is not going to move forward. … She also needs carrots. And the carrot is that Germany is a pro-European country that wants to build something with the other countries in a concerted fashion.”
At noon (CST), the APMEX precious metals spot prices were:
- Gold - $1,734.60 – Up $9.70.
- Silver - $33.65 – Up $0.36.
- Platinum - $1,649.50 – Up $14.60.
- Palladium - $699.30 – Up $10.20.