GOLD REACTS TO POOR EUROPEAN TRADING, U.S. SPENDING CUT REALITY
All three major indexes are poised to start lower this morning. Mainland Chinese stocks tumbled after Beijing announced new property buying restrictions. Those restrictions included higher down payments and mortgage rates on second homes in cities that have seen increases in property prices. There has also been an imposed 20 percent capital gains tax on sales of existing homes. In the U.S., automatic spending cuts begin on Friday as politicians remain inflexible. Kit Juckes, head of foreign exchange at Société Générale, said something that others may be feeling, “I can’t get away from the sense that U.S. political protagonists quite like the idea of some fiscal tightening that they can blame on ‘the other guys.’”
The Gold price recovered in overnight trading and is set to start Monday moving up. Uncertainty in Europe over the political deadlock in Italy following that country’s inconclusive election caused the euro to hit session lows. The correlation between Gold and European stock markets turned negative last month. The dropping prices present a buying opportunity for investors both here and around the world. Physical buying in Asia has picked up, especially in China, due to the recent weakness in prices.
At 9:02 a.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,579.00, Up $4.70.
- Silver, $28.65, Up $0.14.
- Platinum, $1,581.50, Up $6.00.
- Palladium, $724.80, Up $5.40.
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