Closing Gold & Silver Market Report – 8/5/2011
DOLLAR FALLS AGAINST THE EURO; WALL STREET ENDS WORST WEEK SINCE 2008
Media reports out today that the European Central Bank (ECB) plans start purchasing Italian bonds caused the dollar to fall against the euro in trading this afternoon. Other currencies including the franc (Switzerland) and the yen (Japan) also outperformed the dollar as fears about the state of the U.S. economy persisted. A chief currency strategist with Oanda Corp. explained the reason for the euro’s gain by explaining that the ECB’s intention to buy Italian bonds (and Spanish bonds as well) “…indicates they’re actually focusing on the real, current problem with financing in both Italy and Spain.”
The price of gold experienced its second drop in as many days as investors sold off their gold holdings to raise the money needed to cover other losses. With many investors worried about debt issues both here in the U.S. and abroad and staying away from the market, the resulting losses have led to a selloff of gold to meet margin calls, and that selloff has resulted in gold’s price drop these past two days. A senior strategist with MF Global Holdings Ltd. said in an interview today, ““It’s a volatile period for gold. You would think that people would buy gold as a haven now, but they’re selling it because they need to raise cash."
Wall Street’s worst week since November of 2008 came to an end today. Economic fears in the United States and Europe led to huge stock selloffs, and as a result Nasdaq saw a fall of 8.1% for the week, the S&P 500 a fall of 7.2% for the week, and the Dow a fall of 5.8% for the week.
At 4:15 pm (CT), the APMEX precious metals spot prices were:
· Gold - $ 1,664.80 - Up $6.80
· Silver - $38.39 - Down $1.10
· Platinum - $1,721.50 - Down $7.90
· Palladium - $746.00 - Down $9.00