GOLD KEEPS UPWARD TREND GOING; FISCAL CLIFF LOOMING
The price of Gold has continued to climb today with even more news of monetary easing by central banks around the world. "Current monetary easing by central banks is warranted by weak economic growth and subdued inflationary pressures in developed economies," BNP Paribas analyst Anne-Laure Tremblay said. "This trend is likely to continue until we see a notable improvement in economic growth trends. It seems that the stars are now aligned for Gold to move higher," she said. "The next hurdle to overcome will be the $1,800 an ounce level, which we expect to be breached decisively in the fourth quarter."
As the leaders in Europe work on implementing their plan to combat the financial crisis in the area, many remain very doubtful. The two main issues revolve around the ability of all parties involved to work together and the amount of time it will take to get everyone on the same page. Even if those issues are worked out, many believe it will fail due to lack of planning. "People have been living under the illusion that banking union is a substitute for fiscal union. It's about money and having access to taxpayers' resources. There is a risk it will be half-baked if it does not have a fiscal backstop," said Paul De Grauwe, an economist at the London School of Economics, whose analysis has frequently informed policymaking in Brussels.
Over the past few months, the majority of concern in the financial world was the situation in Europe. As of today, the focus has shifted to the United States and the dreaded “fiscal cliff.” In a recent poll of investors, for the first time in almost a year and a half their major concern is directed at the U.S. instead of the EU. With a rally in the European markets and the slow moving U.S. markets, it is undoubtedly becoming the major issue facing the economy at this time.
At 1 pm (EDT), the APMEX precious metals spot prices were:
- Gold, $1771.10, Up $0.90.
- Silver, $34.67, Down $0.06.
- Platinum, $1643.20, Up $5.90.
- Palladium, $673.20, Up $5.90.
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