Morning Gold & Silver Market Report – 9/6/2011
Heading into the Morning Trading - Gold is Up & Stocks are Down
Gold prices once again approached record levels overnight before retreating to just below $1,900 per oz. Silver, platinum and palladium prices are down. U.S. stock futures are also sharply lower on the news out of Europe and the continued disappointment with last week’s jobs report. The European sovereign debt crisis grew even more worrisome over the weekend, when German Chancellor Merkel’s political party suffered election losses. The euro-zone rescue is looking more tenuous, as current administrations could be replaced by administrations more reluctant to bail out at-risk nations.
The big news of the morning is coming out of Switzerland. The value of the Swiss franc, as measured by the value of other world currencies, has been rising sharply of late, due to its increasing safe-haven appeal. The Swiss have been very concerned and now they have taken steps to weaken the franc. The Swiss National Bank (SNB) shocked the markets today by announcing a cap on the Swiss franc. Driven by the fear that a soaring franc will lead to recession, the SNB said it would no longer tolerate an exchange rate below 1.20 francs and they are prepared to purchase other currencies in unlimited quantities to make this happen. Analysts believe the SNB can make this happen because it can print an unlimited amount of francs. However, it will not solve the European-debt problem, which is at the heart of the matter. This announcement will add fuel to the currency wars with Japan, who is prepared to weaken the yen, if buyers move to the yen from the Swiss franc. Gold prices rose sharply on the news as its safe-haven appeal only intensifies.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,896.80 – up $17.90
- Silver price - $42.32 – down 82 cents
- Platinum price - $1,870.00 – down $15.80
- Palladium price - $763.70 – down $19.50