Mid–Day Gold & Silver Market Report – 8/8/2011
GOLD CLEARS $1700 AS EQUITY MARKETS SINK
Gold prices are surging nearly 3%, as the U.S. Stock market heads the opposite direction. Gold prices continue to climb on the debt fears not only facing the U.S., but in the euro zone as well. The European Central Bank’s (ECB) move to purchase Italian and Spanish bonds has not calmed the markets. “Investors are looking upon the ECB bond-buying as the first steps towards the same kind of quantitative easing program the Fed is doing. So, gold acts as the only currency that you can’t print more of, and you are seeing a huge institutional demand for it,” said James Rife at Haber Trilix Advisors.
Moody’s credit rating service has not downgraded the U.S. debt from AAA, but they are keeping their eye on the situation and could downgrade the U.S., if they feel the U.S. plan to reduce debt at anytime losses credibility. Steven Hess of Moody’s commented this morning that although they saw the plans to reduce debt as a positive step, it was not enough for them to classify the situation as stable. "If the process for further deficit reduction that is included in the budget control act produces results that are not really credible, that combined with the economic performance could potentially cause an early move on the rating," Hess told Reuters in an interview.
Meanwhile, Standard & Poor’s has issued additional downgrades. The S&P has cut ratings outlook for Warren Buffet’s Berkshire Hathaway, as well as a number of insurance companies and municipalities.
At 12:25 PM (CT) the APMEX precious metal prices were:
- Gold price - $1,715.30 – up $61.50
- Silver price - $39.46 – up $1.14
- Platinum price - $1,724.00 – up $4.90
- Palladium price – 728.90 – down $14.80