Mid-Day Gold & Silver Market Report – 12/30/2011

IMF DRAWS CRITICISM FOR EUROPEAN EFFORTS

The forces that have driven precious metals prices have been elusive to predict during this past year. The leading drivers for metals and other commodities in 2011 have been the global economy and the Chinese economy. “Problems in the U.S., Europe, and China have all contributed to the weaker performance this year. The risk in moving into 2012 is what’s going to happen in Europe in particular. Some kind of major events there could put more pressure on the market from a sentiment perspective,” said Nick Trevethan of Australia & New Zealand Banking Group Ltd.

Mohamed El-Erain, chief executive and co-chief investment officer at Pimco, shared his opinions in Friday’s Financial Times regarding the pressure the International Monetary Fund (IMF) is feeling from European Union leaders to assist with the inadequate bailout programs for European countries. El-Erain wrote, “For two years, the IMF agreed to a series of programs that were partially designed, inadequately funded and, in some cases, even threatened its preferred creditor status. In each case, the IMF ended up supporting a weak attempt to muddle through, rather than a plan sustainable in the medium term. The world needs a strong and legitimate multilateral institution if it is to avoid costly fragmentation; and Europe needs a credible IMF to help it overcome a deepening crisis. This will only be achieved if there is a change next year in the overly cozy relationship between Europe and the IMF. The IMF must find the courage to resist European bullying; and the rest of the world must help by making a collective effort to accelerate reform of the institution’s governance and representation. Only then would an enhanced IMF be able to help the global economy back to growth and jobs.”

At noon (CST), the APMEX precious metals spot prices were:

• Gold - $1,578.80 – Up $36.90.
• Silver - $28.30 – Up $0.91.
• Platinum - $1,402.00 – Up $37.20.
• Palladium - $657.40 – Up $32.60.