FISCAL CLIFF SCENARIO IS “A DISASTER”
Gold and Silver are mostly flat this morning as U.S. stock futures fell. Eurozone leaders did not approve the release of another round of aid to Greece, and the fiscal cliff still looms over the economic horizon in the U.S. at the end of the year. Economists have predicted that if a fiscal cliff deal does not happen before the end of the year, it could impact gross domestic product to the tune of 5 percent. Sebastian Werner of DWS Investments said, “That’s a disaster for an economy only growing at a 2 percent annual rate.”
Worries about the fiscal cliff and the potential recession it could bring if a deal is not reached could overtake what the euro is doing and have more of an impact on the Gold price. Precious Metals refiner Heraeus said in a report, “Whilst the uncertainty around the U.S. presidential elections came to an end with Obama’s win, the so-called fiscal cliff is now the omnipresent topic. It describes cutbacks and tax increases in case a budget for new indebtedness cannot be agreed. Due to the strong opposition in Congress, difficult negotiations can be expected and hence new volatility and uncertainty,” which historically have been very supportive of the Gold price.
At 9 a.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,727.50, Down $4.90.
- Silver, $32.53, Down $0.05.
- Platinum, $1,585.70, Up $20.70.
- Palladium, $619.20, UP $10.20.
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