GOLD’S ELECTION REACTION, EUROPE’S CLOUDY FUTURE
Now that the U.S. election is over, all eyes are back on the economic issues. Gold started the day higher, but the price has fallen in morning trading. One main issue is that the United States Congress is split between the two major parties and the fear is that there will be no headway in balancing the budget. Many believe the dreaded fiscal cliff is more dangerous than ever after the election. Tim Harvey, senior vice president at ETF Securities U.S. said, "If we see President Obama's mandate extended by 4 more years, his fiscal policies could lead to a continued dilution of the dollar and therefore dollar weakness. Gold generally performs better in weaker dollar environments.
In Europe, the outlook for the next year is far from optimistic. “Europe is going through a difficult process of macroeconomic rebalancing and adjustment which will last for some time still,” European Union Economic and Monetary Commissioner Olli Rehn told reporters in Brussels. The eurozone economy is forecasted to almost completely stop expanding within the next six months. Even Germany, who is the largest economic force in the eurozone, has had their economic forecast cut by more than half in 2013. All of these factors will make it even more difficult to bring the region back to a stable economic situation.
At 1:00 pm (EDT), the APMEX precious metals spot prices were:
- Gold, $1711.70, Down $4.80.
- Silver, $31.68, Down $0.40.
- Platinum, $1537.40, Down $19.40.
- Palladium, $610.50, Down $10.70.
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