Mid-Day Gold & Silver Market Report – 10/10/2011
EURO ZONE SHOWS SIGNS OF HOPE, EGYPT…NOT SO MUCH
Precious metals prices are continuing their upward momentum since the Morning Gold & Silver Market Report. The news of a potential European bailout progressing and the continuing turmoil in the Middle East seem to be a boon to the safe-haven appeal of precious metals. "While a detailed plan was lacking [in euro zone], we view any progress on bank recapitalization as a positive for gold," said UBS in a note. "Typically liquidity concerns and funding issues are not gold's friends."
German Chancellor Angela Merkel and French President Nicolas Sarkozy provided no details of their plans, but said they are working towards tackling the Greek debt crisis and contain the debt problem within the euro zone. The summit of European Union leaders was postponed until October 23 to allow for more time to work on the proposals. "The German and French governments are convinced this will be a contribution to the euro zone winning back confidence and its capacity to act -- and I do mean a contribution, not the 'miracle cure' everyone keeps asking for," German government spokesman Steffen Seibert said.
The concerns in the Middle East have not gone away and the key element over the weekend, surprisingly, was Egypt, where 25 citizens are dead in what was supposed to be a peaceful protest in Cairo. The Egyptian economy is still reeling in the aftermath of the removal of 30-year President Hosni Mubarak. The main concern has to do with religion, but it is not an issue that looks to be resolved any time in the near future, as a number of citizens claimed to be receiving the same treatment they were getting under Mubarak. “This was the worst incident of violence since the revolution. It shows people that the transitional period in Egypt is quite challenging,” Mohamed Abu Basha, an Economist at the Cairo-based investment bank EFG-Hermes Holding SAE, said by telephone. “People were already concerned that there’s no stability or a clear timeline for transition. This makes the picture bleaker.”
At 12:00 PM (CT) the APMEX precious metals spot prices were:
- Gold - $1,671.10 – Up $33.30.
- Silver - $32.16 – Up $1.13.
- Platinum - $1,523.40 – Up $30.10.
- Palladium - $616.50 – Up $28.60.