Closing Gold & Silver Market Report – 12/19/2011
ENGLAND SCORNED, BACKS OUT OF IMF LOAN
Since the Mid-Day Gold & Silver Market Report, precious metals prices have been steady, with some dips through the afternoon. There are concerns for South Korea after the death of Kim Jong Il. There are a number of uncertainties this has presented, including a possible Arab Spring-like event. The European debt crisis has intensified, with England bailing out of the International Monetary Fund vote for funding. All the uncertainty has increased the demand for physical Gold. “We have seen since last Wednesday very good demand for physical (Gold),” said Afshin Nabavi, head of trading at MKS Finance. “It was still continuing this morning.”
Stock markets slipped today over comments made by European Central Bank (ECB) President Mario Draghi regarding the ECB not being able to step in to buy bonds based on the founding treaty of the eurozone. The overall feeling revolves around a need for safety, said PIMCO Chief Executive Mohamed El-Erian. “The ECB has made it very clear that it doesn’t believe in the bazooka. … It believes in the national governments and other institutions getting their acts together first.”
The other concern that presented itself during a three-hour conference call was England’s refusal to participate in increasing the IMF’s resources to help the debt crisis. This places a greater need on Russia or China to help in bailout efforts. The United States is concerned about its exposure to the debt. German Finance Minister Wolfgang Schaeuble said, “Washington cannot make bilateral loans available to the IMF without Congress approving it. … There's no chance of that, and the American government has always made that clear.” There are still plenty of hurdles and difficulties within the eurozone, including Finland’s resistance to how the European Stability Mechanism is run, which could cause issues as early as July 2012.
At 4:03 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,595.30 – Down $2.60.
- Silver - $28.82 – Down $0.89.
- Platinum - $1,411.20 – Down $7.10.
- Palladium - $610.10 – Down $16.40.