Morning Gold & Silver Market Report – 12/21/2011
ECB TO LEND NEARLY 500 BILLION EUROS TO AILING BANKS
Precious metals prices are relatively flat amid encouraging news out of Europe this morning, but U.S. stock futures have given up some early gains. The European Central Bank’s (ECB) lending program will be giving eurozone banks a total of 489 billion euros, which shows that banks that had needs of liquidity are having those needs met. However, it also has shown that many more banks needed a loan than what was expected.
In overnight trading, the U.S. dollar weakened against the euro, which caused Gold to spike over $1,640 per oz. The trend has started to reverse, as the dollar is gaining traction. As has been normal of late, Gold is tracking the euro, or moving opposite the dollar. It seems as though investors have started to focus on the fact that so much funding was needed from the ECB, rather than the fact that the ECB is standing behind the region’s banks. Standard Bank’s Marc Ground said, “As long as markets remain optimistic (in Europe), dollar weakness should sustain interest in precious metals.” All eyes now are on U.S. existing home sales data, due to be released later this morning.
In the United States, Republicans and Democrats are reprising their roles in a drama similar to the debt ceiling issue earlier this year. Both sides are blaming each other for halting a payroll tax cut that affects 160 million Americans. If the cut is not extended by Dec. 31, the average American worker will have $1,000 less to spend next year, which experts say could affect economic growth.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,619.40 – Up $1.80.
- Silver - $29.54 – Down $0.03.
- Platinum - $1,431.00 – Down $2.90.
- Palladium - $632.50 – Up $2.90.