Morning Gold & Silver Market Report – 4/17/2012

EUROZONE DEBT ISSUES BOOST GOLD’S SAFE-HAVEN APPEAL  

Gold and Silver are trading modestly higher this morning. Concerns over the eurozone debt crisis have surfaced again, prompting investors to take another look at Gold as an insurance policy within a portfolio. Oil took an opportunity to gain, as well, as U.S. retail sales were better than expected, weakening the argument that high oil prices would slow the economy. U.S. stock futures are higher and continue to be motivated by corporate earnings at this time.

Furthering the idea that this is an age of market intervention by central banks, analysts believe that bullishness surrounding the European Central Bank’s “tricks” to boost liquidity has ended. Now, investors seem to be waiting for more. Eimear Daly of Schneider Foreign Exchange said, “I think it’s basically the markets are now really bearish on Spanish and Italian debt.” Yields on 10-year Spanish bonds rose to 6 percent for the first time since last year. “Spain is basically hostage to bond investors. What all the yields are showing is that the markets think that if someone needs a bailout, it will be Spain,” Daly added.

When analysts refer to Gold as a safe-haven investment, they are not always referring simply to economic turmoil. Geopolitical tensions can also cause a boost in Gold’s appeal, such as the current situation with North Korea. After that country’s rocket failure last week, the U.S. is looking at “all options” to stop North Korea from conducting a third nuclear test. The U.S. already has halted food aid for the country after an agreement was broken by the aforementioned rocket launch.

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

• Gold – $1,654.10 – Up $3.90.
• Silver - $31.77 – Up $0.34.
• Platinum - $1,575.10 – Up $0.30.
• Palladium - $654.10 – Up $2.40.

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