Closing Gold & Silver Market Report, 7/16/2012
GERMAN RULING COULD DELAY EUROPEAN FISCAL PACT BY 8 WEEKS
Precious Metals prices have remained stagnant during the day. There is much speculation on what will affect the Gold price and when it may happen. Jeffrey Sica at SICA Wealth shared his view on the possibility that Federal Reserve Chairman Ben Bernanke may announce another stimulus plan. Sica said, “If he doesn’t say anything against tightening, I believe it’s going to increase the likelihood of stimulus. The Gold market is going to attach itself to that and get appreciation.” In a note, UBS said, “Macro developments and policy expectations are likely to continue driving the Gold market for the remainder of 2012, and so it’s more of the same for Gold as we have seen in recent months. Clear signs of deterioration in the global economy are needed for the market’s expectations of policy response to accelerate, which in turn would lift Gold prices.”
The Federal Constitutional Court in Karlsruhe has set a date of Sept. 12 to decide whether Germany can legally participate with the European Stability Mechanism (ESM) proposal and the fiscal pact. The concern lies in how this wait could potentially worsen the debt crisis Europe has been undergoing the past two and a half years. “It’s not great news, as it just increases the uncertainty and effectively prevents the ESM from being where it should be,” Lloyds Bank strategist Eric Wand said. “But I think after last week, when they said they needed further time, the market kind of understood it wouldn’t happen this side of the summer break.”
At 5 p.m. (EDT), the APMEX Precious Metal spot prices were:
- Gold, $1,590.20, down $3.30.
- Silver, $27.38, down $0.07.
- Platinum, $1,418.80, down $16.40.
- Palladium, $578.80, down $7.90.
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