Mid-Day Gold & Silver Market Report – 06/20/2011
MARKETS RECOVER AS GREEK FEARS DIMINISH
Both the precious metals and equity markets are recovering from morning losses, as the eurozone finance ministers gave Greece two weeks from Monday to approve stricter austerity measures, if they want to receive an emergency loan of 12 billion euros. “Even though the EU is talking tough, it looks like things are going to come through in terms of providing additional funding, at least through the end of this year, and probably something will come together on the broader package as well," said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois. Although there are no permanent fixes in play, the markets have calmed for the moment.
The assumption that Greece will conform to the above demands have driven the euro up against the U.S. dollar, which probably factors in to rising gold and silver prices. Many traders now feel the selloff of the euro went too far.
Not everyone is so sure that delaying a real solution to the Greek debt problem is a good idea. Mohamed El-Erian says that there is nothing but bad choices ahead for Greece and at some point, bond holders will be forced to accept some restructuring. "The issue is nothing so far has been done to solve the two problems Greece has: One, excessive debt and second, an inability to grow," he said. "This problem is not going to go away. It's going to weigh on markets here and we're going to see the same set of headlines over and over again. We simply cannot continue to kick the can down the road, because we're coming to the end of the road in Greece."
At 12PM (CT) the APMEX precious metal prices were:
- Gold price - $1,542.90 (up $3.30)
- Silver price - $36.07 (up 24 cents)
- Platinum price - $1,730.80 (down $22.30)
- Palladium price - $750.30 (up $2.90)