Morning Gold & Silver Market Report – June 20, 2011
STILL NO DECISION IN GREECE SENDS MARKETS LOWER
A decision on a second bailout for Greece was expected to be announced on Sunday, but no decision has been made, as the euro zone finance ministers are determined to get tougher austerity commitments out of Greek’s parliament. The finance ministers are not only looking for support from the Greek government; they want a plan supported by the opposition. This comes at a time when Greece is experiencing violent protests against the current proposed austerity measures. No decision spurs greater uncertainty, which has caused the worldwide equity and precious metals markets to head lower in overnight trading. The U.S. stock market futures are down and appear to be heading for a weak opening.
One voice who feels the European Union (EU) is completely missing the mark with the Greek bailout is PIMCO’s co-CEO, Mohamed El-Erian. Mr. El-Erian stated Sunday that the EU will only be throwing good money after bad if it keeps pumping money into the Greek economy. These actions, intended to save private creditors from taking a loss by shifting the loss to European taxpayers, will only exacerbate the difficulties of a restructuring down the road. Greece has put no measures into place to effectively deal with their mounting debt. Eventually a price will have to be paid and continued support will just be wasted money.
The world’s largest consumer of gold, India, increased their import of gold and silver by 222% between April and May 2011, when compared to the same time period one year ago. Gold demand is seen to be rising by 25% as Indian investors purchase gold as a hedge against their rising inflation.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,537.70 (down $1.90)
- Silver price - $35.70 (down 14 cents)
- Platinum price - $1,729.00 (down $24.10)
- Palladium price - $738.00 (down $9.40)