PROBLEMS IN ITALY CONTINUE; 40 PERCENT CHANCE OF ‘CLIFF’ DEAL
Precious Metals prices have been relatively steady in afternoon trading as most investors are still awaiting the looming “fiscal cliff.” “There’s a 40 percent chance of a ‘fiscal cliff’ deal before year end,” Erskine Bowles, co-chair of President Obama’s 2012 debt commission, said. The low number isn’t very attractive to investors looking for stability, but Bowles continued, “The chances of getting it done are better and that’s what’s key.” All accounts indicate President Obama will not accept any deal unless taxes are increased for the top two percent of wage earners, while most Republicans say they will not accept any deal that raises taxes at all.
After news this morning that former Italian Prime Minister Silvio Berlusconi’s political party withdrew its support of the Italian government, current Prime Minister Mario Monti announced that he will step down at the end of the year. Nomura economists painted a bleak picture of Italy’s situation. “We believe that, should the elections yield a fragmented government majority with limited capacity to act and deliver important reforms, the ECB would not be willing to support Italy, even in the context of significant market pressure. In this circumstance, the risk of a standoff between the ECB and Italy are non-negligible and markets would likely reassess Italian sovereign risk by assigning a higher credit risk to the sovereign,” they wrote.
At 9 a.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,714.00, Up $8.50.
- Silver, $33.31, Up $0.20.
- Platinum, $1,625.70, Up $17.70.
- Palladium, $702.80, Up $4.80.
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