Morning Gold & Silver Market Report – 12/19/2011
WHAT GEOPOLITICAL RISKS WILL SHAKE MARKETS IN 2012?
The Gold price is rising moderately, while the Silver price is down this morning after choppy weekend trading. North Korean leader Kim Jong Il’s death sent Asian stocks downward, which is supporting the U.S. dollar along with the European debt crisis. Suki Cooper of Barclays Capital said the dollar’s strength “is likely to weigh upon Gold prices in the absence of strong physical demand over the remaining weeks of the year.” Cooper continued, “Longer term, Gold still possesses structural pillars of support in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying.” Tao Jinfeng of Haitong Futures Co. said “many buyers (are) looking out for a bargain,” which will support the price of Gold.
U.S. stock futures are rising this morning, but experts expect a mild trading day. European Union leaders are holding a conference call today, and European Central Bank President Mario Draghi is scheduled to speak in front of the Committee on Economic and Monetary Affairs of the European Parliament. Richard Kelly of TD Securities said that these events “may provide some headlines,” but no immediate significant effect to the markets is expected.
Nomura Holdings constructed a list of 10 geopolitical risks that could have a major effect on the markets in 2012. Topping the list was a potential breakup of the eurozone, followed closely by America’s debt problems. The list brings to the forefront some issues that are often left off the front page, and can be a reminder as to how many geopolitical issues are still ongoing. Also on the list were the Arab Spring disrupting oil production, China’s economy declining, the tension between Pakistan and India, and the now-uncertain situation in North Korea.
At 8 a.m. (CST), the APMEX precious metals prices were:
- Gold - $1,606.90 – Up $9.00.
- Silver - $29.04 – Down $0.66.
- Platinum - $1,425.90 – Up $7.60.
- Palladium - $630.40 – Up $3.90.