Closing Gold & Silver Market Report – 2/20/2012
GOLD PRICE UP; ISRAEL MULLS ATTACK ON IRAN’S NUCLEAR PROGRAM
Gold prices ended the day up, buoyed by a Chinese cut in lender reserve requirements and optimism in the markets that Greece’s bailout would be approved by eurozone finance ministers. In an e-mail today, William Adams, the head of research for FastMarkets.com, wrote, “The metals and markets in general have been boosted following the cutting of reserve ratios in China.” In response to the news from Greece, the euro climbed versus the dollar. Precious metals prices historically move opposite to the dollar. Silver, Platinum, and Palladium prices ended the day up, as well.
As a second round of talks was under way today between Iranian officials and representatives from the International Atomic Energy Agency (IAEA) over Iran’s nuclear program, Israel made it clear that it is considering whether to attack the nuclear infrastructure in Tehran. At the same time, a day after Iran suspended exports of oil to Britain and France in response to new economic sanctions, the Middle Eastern country is again threatening to close the Strait of Hormuz. Closing the strait would prevent oil tankers from traveling to and from the Persian Gulf. Many are concerned that Iranian nuclear efforts, including the enrichment of uranium, is part of an effort to develop nuclear weapons. Iran has firmly denied the validity of such concerns, saying that its nuclear program is for the development of civilian power plants only. However, in November the IAEA stated that it was in possession of information that showed some of Iran’s research was weapons-related. Israel has repeatedly stated that it feels its existence would be threatened if Iran developed nuclear weapons capability.
According to a report by the Organization for Economic Co-operation and Development (OECD), developed economies saw their economic growth slow to a near standstill in the latter part of 2011. For the 34 economies included in the OECD, Gross Domestic Product (GDP) only grew 0.1 percent from the third quarter to the last quarter of 2011. And although GDP was 1.3 percent higher than it was in the last three months of 2010, that still represents a growth rate that is the slowest in two years. Only the United States’ 0.7 percent economic growth kept the overall GDP growth number from being in the negative. The economy of the eurozone shrank by 0.3 percent in 2011’s fourth quarter. Economists fear that shrinkage signifies that a recession is imminent.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,734.50 – Up $9.60.
- Silver - $33.67 - Up $0.38.
- Platinum - $1,649.10 - Up $14.20.
- Palladium - $696.90 - Up $7.80.