Closing Gold & Silver Market Report – 1/17/2012
GOLD RALLIES; U.S. RECOVERY OUTLOOK POSITIVE
Precious metals prices ended today on a positive note. Gold’s rally today was based on a weakening dollar and Europe’s financial and credit issues. Jim Steel with HSBC said, “The market reacted to an increase in risk tolerance. Gold was also riding the coattails of sharp increases for U.S. stocks and oil.” George Gero of RBC Capital Markets shared his viewpoint on Europe, saying, “The downgrades of the eurozone countries means fiscal stimulus is not far behind.”
Most of the focus has been on credit rating agency Standard & Poor’s (S&P) and its decision to cut the credit ratings of nine eurozone countries. The downgrades came as no surprise, as speculation had been in the news for a while. Steen Jakobsen at Saxo Bank said, “Effectively, S&P did what it was supposed to do: It ignored the ‘PowerPoint presentation’ from the EU and looked only at the accounts. The accounts speak clearly for themselves: no progress, no real plans.”
The outlook is optimistic for growth in the U.S. economy, which is pushing the price of Silver up. Silver is used heavily in electronic devices. Investors became aware of the success in debt auctions by Spain and Greece. This relieved the uncertainty that the eurozone fiscal crisis may affect recovery in the U.S.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,653.30 – Up $21.50.
- Silver - $30.12 – Up $0.53.
- Platinum - $1,525.40 – Up $37.60.
- Palladium - $652.10 – Up $16.10.