GDP MISSES EXPECTATIONS IN AMERICA; SPAIN IN ‘HUGE’ CRISIS
Another day, another round of disappointing economic data in the United States. After 3 percent economic growth in the fourth quarter of 2011, 2012’s first quarter saw growth of just 2.2 percent. Stock futures and precious metals reversed course after the release of the report, with stock futures giving up gains and Gold all but recovering from early-morning losses. These numbers are not likely to push the Federal Reserve into another round of quantitative easing, though Chairman Ben Bernanke has indicated that is a possibility if the economy deteriorates further.
The Gold price has been very determinate upon the Federal Reserve lately, and the fact that it has been bouncing between $1,600 and $1,700 shows that there is not much news coming from the Fed. Brien Lundin of Gold Newsletter said Bernanke’s comments from earlier in the week “reveal that the Fed, if anything, is more open to monetary stimulus now than at the last meeting.” Lundin also explained that Gold quickly rebounded earlier this week after “quick-acting traders had searched the Federal Open Market Committee statement for any mention of quantitative easing, and, having found none, sold Gold.”
“Spain is in a crisis of huge proportions,” stated Spanish Foreign Minister Jose Manuel Garcia-Margallo. Spain has a 24 percent unemployment rate, and Standard & Poor’s downgraded the country’s sovereign debt rating by two notches. Spain, along with the United Kingdom, has slipped into a second recession in the past few years. As the eurozone’s fourth-largest economy, Spain has been labeled by some observers as “too big to fail.” Gilles Moec, an economist with Deutsche Bank, said, “It’s a very challenging situation. I don’t think that the banks are cornered yet, but the government must come out soon to say how they will address them.”
At 9 a.m. (EDT), the APMEX precious metals spot prices were:
- Gold – $1,665.10 – Up $3.60.
- Silver - $31.31 – Up $0.03.
- Platinum - $1,577.00 – Up $6.80.
- Palladium - $674.90 – Up $1.20.
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