Morning Gold & Silver Market Report – 3/12/2012

ANY EURO REBOUND LIKELY GOOD FOR GOLD  

The world’s largest banks are looking more favorably at the euro, as they see the European Central Bank (ECB) providing unlimited cash to the European financial system. Bloomberg news surveyed more than 50 strategists and reported that their median estimate predicts a stronger euro for the second and third quarters. A stronger euro could be positive news for Gold prices. The rising euro should lower the U.S. dollar, and the price of Gold typically would go up as a result.

The size of China’s trade deficit took markets by surprise this morning. Its deficit of $31.48 billion is the largest in 12 years. Economists had expected the gap to grow as a result of seasonality, but not by as much as it did. Overall, this points to a weakening Chinese economy. The slowdown is happening faster than the Chinese government expected. Senior Chinese officials are hinting that the country’s currency may not appreciate as quickly as it has the past couple of years. It is also expected that bank lending will be encouraged in order to push more liquidity into the system.

Few surprises are expected today as eurozone finance ministers are set to sign off on a second bailout package for Greece. They are certain to turn their attention to Spain, which looks likely to run afoul of budget rules set by the European Union (EU). Spain is set to miss its deficit target again this year.

At 8 a.m. (CDT), the APMEX precious metals spot prices were:

• Gold –$1,700.10 – Down $12.20.
• Silver -  $33.86 – Down $0.37.
• Platinum - $1,685.20 – Down $0.70.
• Palladium - $705.10 – Down $4.80.