Closing Gold & Silver Market Report – 11/1/2011
MARKETS CRUMBLE ON PAPANDREOU’S AUSTERITY CURVEBALL
Precious metals and stocks ended the day in negative territory on renewed fears of a Greek default. Precious metals fell initially but recovered throughout the trading day, with gold closing at only a modest loss. Silver traded in a wide range, at one point falling almost to $32.00 but closed the day at $33.46.
Uncertainty is still the name of the game on Wall Street. Only 24 hours after the collapse of MF Global, a major player in high finance, Greek Prime Minister George Papandreou dropped the bombshell that he was putting the most recent austerity package to a vote among Greek citizens. The package is extremely unpopular within the Greek populace. If the vote fails, the fear is that Greece will experience what bond traders call a “hard default.” All of this worked to end the monthlong rally in stock markets as the Dow Jones Industrial Average fell nearly 300 points today.
Despite market turmoil and calls from party members for Papandreou to step down, it appears the prime minister is sticking to his decision. Angelos Tolkas, a spokesman for the prime minister, said, “We’re not retreating, and we haven’t retreated on all the things we needed to do to save the country. As the prime minister said to his lawmakers yesterday, this is how we’re proceeding, and these are our next steps.”
Some analysts expect the Federal Reserve to hint at another round of monetary stimulus during its statement following a two-day meeting of the Federal Open Market Committee (FOMC), the group that sets monetary policy for the Fed. “While we don't expect any additional actions at this time, it will be important to focus on the language in the press release. It is increasingly likely that the FOMC will be providing the groundwork for additional steps in early 2012," said Paul Ballew, former Fed staff member and chief economist at Nationwide.
At 4:04 p.m. (CT), the APMEX precious metals spot prices were:
- Gold - $1,723.50 – Down $3.70.
- Silver - $33.46 – Down $0.94.
- Platinum - $1,592.80 – Down $14.80.
- Palladium - $639.00 – Down $14.20.