Mid-Day Gold & Silver Market Report – 6/2/2011
OIL UP FOR GRABS
Precious metals are up today on the news of the jobs report and fears of a double dip recession. The U.S. dollar recovered from this morning’s report, but precious metals are trading higher at the moment, despite historical reactions to the contrary. One possibility for this is that the dollar only appears stronger since it is being compared to the euro, which is sliding due to the debt crisis in the Eurozone, namely Greece. Even though the dollar is “winning” against the euro, it is like two 90 lb. weaklings fighting each other and one wins. They are still not heavyweight contenders.
Steven Hess, senior analyst at Moody’s, tries to put this into perspective as far as the U.S. debt situation: “The heightened polarization over the debt limit has increased the odds of a short-lived default.” If the U.S. were to default on their debt, even a little (which would be a gross understatement), then the tables could turn in the battle for the dominant currency. The dollar would be less desirable, creating disinterest from other countries. This would cause a domino effect of negative events that will directly affect U.S. citizens. Hess explains in more detail the effects that this could have globally and locally.
Many Americans are brushing off the news out of Yemen, thinking it is a small country that is irrelevant to the bigger picture. Right now, Yemen is in such dire straits that it may take years to recover. How is this relevant? Financially, Yemen is a smaller country that has needed restructuring and stronger leadership for quite some time. This crisis has created utter chaos, with hostile tribes cutting off domestic oil supplies and electricity. Food and water are becoming scarce. At times like these, people are desperate for peace; someone to take control and make it all better. Who would want to help an oil rich country?
At 12:40 pm (CT) the APMEX precious metals spot prices were:
- Gold – $1,542.70 (down $9.50 on the day)
- Silver – $36.18 (down $0.11)
- Platinum – $1,819.30 (up $0.50)
- Palladium - $787.10 (down $14.70)