Closing Gold & Silver Market Report – 11/21/2011
NO DEAL ON SPENDING CUTS COULD LEAD TO FURTHER LOSSES & DOWNGRADES
Gold and silver have bounced off of their lows for the day, but still have posted significant drops today, following the announcement by members of the congressional super committee that no deal would be reached by Wednesday’s deadline. Gold was pushed down, in part, by a stronger dollar. brought on by a flight to cash in all asset classes. The market is in a completely ‘risk-off’ mentality today, and gold hasn’t been seen as a flight-to-safety vehicle lately,” Bill O’Neill, a partner at Logic Advisors. “I don’t think the long-term outlook has changed, though.”
The lack of an agreement of any kind among lawmakers in Washington raised the speculation today that further downgrades to the U.S. credit rating could be coming, as well more large losses in equity markets. “Failure to reach agreement on at least the minimum required savings will reflect poorly on Congress and the S&P 500 could fall by 10 percent to 1,100,” said David Kostin, an equity strategist for Goldman Sachs. Kostin went on to say, “The wide range of possible outcomes on both the super committee process and the unstable political economy in Europe drives our view that investors should assume the worst while hoping for the best.” In the words of Daniel Clifton, policy strategist with Strategas Research, “We would expect further downgrades, a first downgrade from Moody’s and Fitch and possibly a second downgrade from S&P.”
At 4:15 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,679.90 – Down $47.20.
- Silver - $31.67 – Down $0.80.
- Platinum - $1,551.40 – Down $37.30.
- Palladium - $592.50 – Down $14.70.