Mid-Day Gold & Silver Market Report – 10/14/2011
IMF PUT IN ITS PLACE, U.S. TO PLAY GREATER ROLE
Precious metals prices have remained relatively steady since the Morning Gold & Silver Market Report. The continuing European Union (EU) debt crisis continues to be a source of concern for global markets. The G20 conference, which began today, has already seen its fair share of interesting propositions today. According to Ross Norman of Sharps Pixley, "The big picture remains positive for gold. The supply-demand fundamentals are very much in place and there has been an augmentation in that rally by economic fears … Presently gold sits towards the top end of its trading range... and awaits fresh impetus — physical demand [of gold] is robust and there is good support below this market."
EU officials are considering a blanket write-down of up to 50% on Greek bonds. This would be a kind of protection for banks and bond purchasers as a means to combat the debt crisis. There are provisions in the discussions to help stabilize that type of proposal. The main component to any proposal’s success or failure is directly tied to getting Greece back to being a viable euro zone contributor again. The Greek economy is set to shrink for a fifth year and its debt is set to reach 172% of its Gross Domestic Product. The conference of EU officials is set to run for another week, with the hope that a truly viable plan comes forth.
A number of issues are set to be addressed in the G20 conference, including what exactly the role of the International Monetary Fund (IMF) should be during this crisis. One idea that has already met resistance is not expanding the size of the IMF at this time. There are other proposals on the table as well, like injecting more capital and developing different loan options, which were shot down, for now, in the hopes to get the European debt crisis in order. "The first priority here is for Europeans to put their own house in order," Australian Finance Minister Wayne Swan said. U.S. Treasury Secretary Tim Geithner also stated that the IMF is well-funded and could implement a program similar to the Troubled Asset Relief Program, which helped the U.S. through its debt crisis in 2008. He also said, "Through the IMF, of course, we're already playing a very major role," he said in a live interview in Paris. "We're happy to see the IMF continue to play that role in support of a more forceful, comprehensive strategy where Europe's own resources—very ample resources—are deployed on a much more substantial scale."
At 12:02 PM (CT) the APMEX precious metals spot prices were:
- Gold - $1,682.30 – Up $11.80.
- Silver - $32.17 – Up $0.46.
- Platinum - $1,556.00 – Up $23.60.
- Palladium - $624.00 – Up $27.90.