Closing Gold & Silver Market Report, 8/2/2012
ECB CHIEF STRIKES OUT AFTER PROMISING HOME RUN
Stocks and many commodities sank lower today after the lack of any sign of commitment to stimulus by the European Central Bank. ECB President Mario Draghi had buoyed markets last week by promising that the ECB would “do whatever it takes.” However, at today’s news conference, “whatever it takes” turned into “what didn’t work when we tried it the first time.” While Draghi did say that the ECB would keep interest rates low to encourage lending by banks, this was far short of what was expected. “It’s status quo. I don’t know why people feel that authorities can come up with magic solutions. I don’t know that the magic bullet exists. There are limits to what the ECB can do,” said Hayes Miller, head of asset allocation in North America at Baring Asset Management Inc. Gold prices fell by about 1 percent on the news.
In a rare show of bipartisanship, members of the Senate Finance Committee passed legislation today containing $205 billion in tax breaks. However, analysts say the bill would have to be radically changed to pass through the House of Representatives. Still up in the air is exactly how Washington will handle the looming “fiscal cliff” -- the massive tax hikes and spending cuts demanded by the deal struck to raise the debt ceiling last year, scheduled to take effect in January. “These steps ... pare down the number of ‘must pass’ issues Congress has to tackle during the lame duck period, which will facilitate deal making on the toughest questions,” said Sean West, an analyst for Eurasia Group.
At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,589.40, Down $15.50.
- Silver, $27.18, Down $0.47.
- Platinum, $1,387.90, Down $13.40.
- Palladium, $571.40, Down $12.30.
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