Morning Gold & Silver Market Report, 6/14/2012
GOLD MAY BENEFIT THANKS TO PATHETIC BOND YIELDS
American stock futures are mostly flat this morning, with many investors seemingly unsure how to react to recent developments in Europe and the United States. David Morrison of GFT Markets said, “As we have seen many times recently, the previous day’s price action has been reversed in early trading. Yesterday we saw stocks rally” as a result of J.P. Morgan’s chief executive testifying before the Senate Banking Committee. However, stocks “then tumbled after an auction of U.S. 10 year Treasuries,” Morrison said. While investors believe stocks may not be the safest place for their money, Morrison said, “An increasing number are coming to the opinion that this continued flight into U.S. Treasuries despite pathetic yields is a very bad sign indeed.” Gold could benefit from this realization, as the metal has historically been a safe haven investment in times of uncertainty.
At a recent bond auction, the yield on 10 year bonds in Spain rose above 7 percent, which was the trigger point for Greece, Ireland, and Portugal when those countries requested aid from the European Central Bank. Moody’s Investor Service cut Spain’s credit rating by three notches and now rests one level above junk status. The pressure is on German Chancellor Angela Merkel to come up with a solution, but she recently shot down what she termed “miracle solutions,” calling them counterproductive and said that they would violate the German Constitution.
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,627.50, Up $8.10.
- Silver, $29.01, Down $0.03.
- Platinum, $1,486.80, Up $18.00.
- Palladium, $625.00, Up $1.80.
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