SPAIN’S RECESSION CONTINUES; HEDGE FUNDS RETURNING TO PALLADIUM
Precious Metals prices are rising this morning as the U.S. dollar falls, with Silver and Platinum leading the way. Global stocks are up as well due to Hurricane Sandy looking to be less costly than expected. Wall Street is closed for the second day in a row, though electronic trading continues at very low volumes, “which makes today’s gains quite fragile, and the potential impact of the storm for the insurance sector, estimated at around $20 billion, has not been priced in yet,” according to Patrice Perois of Kepler Capital Markets.
The austerity program in Spain to cut the public deficit caused the country’s recession to extend into the third quarter. Spain’s gross domestic product receded by 0.3 percent in the past quarter, marking the fifth straight quarter of contraction. In fact, it is speculated that the only reason the contraction wasn’t larger is because families are making big purchases ahead of a looming tax hike.
Palladium has been the worst-performing Precious Metal this year, falling by 9.3 percent compared to Platinum’s 11 percent gain, but a turnaround may be in store. Jeffrey Sica of SICA Wealth Management said, “Platinum got the South Africa [mining strikes] boost, but Palladium didn’t enjoy that. I do anticipate higher prices because of the global liquidity push. At some point there will be growth revival.” Hedge funds are buying Palladium again in anticipation of potential decade-high prices.
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,714.20, Up $5.00.
- Silver, $32.03, Up $0.27.
- Platinum, $1,548.60, Up $17.20.
- Palladium, $597.40, Up $6.60.
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