Closing Gold & Silver Market Report – 10/6/2011
GEITHNER WARNS OF EURO DEBT DAMAGE; OBAMA URGES SWIFT ACTION
Since the Mid-Day Gold & Silver Market Report, prices on gold, silver, platinum, and palladium have all seen moderate gains, spurred on by the stocks and commodities rally that came in response to the European Central Bank’s (ECB) efforts to increase liquidity and soften Europe’s ongoing debt crisis. Leo Larkin, a metals equity analyst with Standard & Poor's, stated, "I really don't see [that] the safe-haven attraction of gold is going to change very much, because of all the financial problems in Europe and in the western world. There is still a lack of confidence in financial assets."
In an appearance before a Senate Banking Committee meeting today, U.S. Treasury Secretary Timothy Geithner warned of the damage a severe debt crisis in Europe could do to the economy. Secretary Geithner was careful to say the United States’ exposure to such a crisis would be limited, stating, “Our institutions hold substantial cushions of capital against the potential risks they might face ahead, but that is something we have to keep monitoring closely.” However, he cautioned that the European debt crisis could cause harm by weakening demand and undermining economic confidence.
In the wake of ECB plans to resume buying covered bonds and provide longer-term refinancing operations to banks, President Obama is urging leaders in Europe to pick up the pace. Ramped up ECB actions, which include an increase in liquidity to struggling European banks and plans to allow member states to coordinate bank recapitalization, come amidst fears that a default by Greece is just months away, and that such a default would start a chain reaction of bank failures and credit downgrades among sovereign countries. President Obama, in a press conference given in Washington today, said that uncertainty over debt issues in Europe was affecting markets worldwide and slowing down economic recovery in the U.S. The President stated that he hoped European leaders would have a plan in place in time for the November 3rd and 4th “Group of 20” summit.
At 4:15 PM (CT), the APMEX precious metals spot prices were:
· Gold - $1,653.80 - Up $10.20
· Silver - $31.95 - Up $1.59
· Platinum - $1,517.00 - Up $34.10
· Palladium - $607.30 - Up $34.90