Closing Gold & Silver Market Report – 12/16/2011
HOUSE PASSES BILL; RATING AGENCY FITCH PUSHES DOWNGRADES
Since the Mid-Day Gold & Silver Market Report, precious metals prices have been on the rise. The good news surrounding the passing of the House bill to avert a government shutdown has been tempered by the ongoing European debt crisis. The uncertainty has been one factor in helping Gold prices rally today. When considering Gold, though, one should not be watching the minute-to-minute movement of the market, but as a long term investable asset. Frank Holmes, chief executive of U.S. Global Investors, said, “People get so caught up with the next three minutes for Gold, and they should really be focused on the next three years. It's a non-event for Gold to go plus or minus 15% over a 12-month period. I still think Gold prices have the ability to double over the next five years, which would out us around $3,600 an ounce.”
The U.S. House of Representatives passed the spending bill today to avoid a government shutdown. The bill is being hailed as a rare bipartisan compromise, which is saying something going into an election year with typical partisan politics. U.S. Rep. Hal Rogers, R-Ky., said, “After weeks of arduous negotiations on this package with our Senate counterparts, we’ve struck a fair, bipartisan compromise. No party got everything they wanted.” Those comments were echoed by U.S. Rep. Norm Dicks, D-Wash., who said, “It reflects the fact that neither party can pass this bill on its own in either the House or the Senate.”
Credit rating agency Fitch today put a number of countries in the eurozone on notice for potential downgrade, but that agency reaffirmed France’s AAA rating. Belgium, Spain, Slovenia, Italy, Ireland, and Cyprus were put on notice. Standard & Poor’s had already put 15 of the 17 nations on notice of potential downgrades. Fitch said, “Of particular concern is the absence of a credible financial backstop. In Fitch's opinion, this requires more active and explicit commitment from the ECB (European Central Bank) to mitigate the risk of self-fulfilling liquidity crises for potentially illiquid but solvent euro area member states.”
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,600.90 – Up $23.70.
- Silver - $29.74 – Up $0.45.
- Platinum - $1,421.50 – Up $13.50.
- Palladium - $626.00 – Up $4.30.