Morning Gold & Silver Market Report – 5/18/2011
PRECIOUS METALS REBOUND; CHINA HEADED FOR RECESSION?
Precious metals are up across the board in early-morning trading, thanks in part to the dollar sliding versus the euro. The euro hit a seven-week low earlier this week, but has since recovered. Afshin Nabavi of MKS Finance says, “The demand for physical [precious metals] is rather interesting again.” Gold bars are currently very popular in Asia, particularly China, as investors took advantage of the three-day decline in gold. Silver, platinum, and palladium have also recovered from losses earlier in the week.
Hedge fund manager Jim Chanos believes that China’s economy could be heading for recession, thanks to signs of weakening in areas such as real estate. There is a slowdown in housing sales, as well as a decline in prices. He also believes that if China does too much to slow down growth, it could backfire, sending the economy backwards.
The European debt crisis continues with news that the European Central Bank refused a restructuring of Greek debt. An ECB Executive Board member explained that it was not the appropriate way to approach the situation, as it could damage the banking system, which would “create a catastrophe.” A recent Bloomberg survey indicated that 85% of international investors believe that Greece will probably default on its debt. They feel the same way about Ireland and Portugal, as well. The International Monetary Fund also warned Greece that unless it sharply accelerated reforms, attempts to get their finances under control would fail.
At 8:00 am (CT), the APMEX precious metals spot prices were:
- Gold – $1,493.70 (Up $12.20)
- Silver – $34.59 (Up $1.01)
- Platinum – $1,773.00 (Up $11.00)
- Palladium - $734.50 (Up $16.30)