IMF PLAN AIDS EUROPE, FACES CHALLENGES; U.S. JOBLESS CLAIMS FALL
Most precious metals prices were on the rise in early morning trading. The euro has reached a two-week high against the U.S. dollar. The announcement of access to bailout funds from the International Monetary Fund is facing hurdles but is viewed as a boost to European stocks. Senior analyst Radeep Unni of Richcomm Global Services said, “Rising risk appetite, a weak U.S. dollar and the breach of key resistances is giving Gold the momentum to head towards the $1,700-an-ounce level in the near term.”
The IMF has reached out in hopes of doubling its cash reserves by almost $600 billion as a means to help countries deal with the eurozone debt crisis. The plan faces challenges from a number of countries, including the United States. The plan has some support from Japan, but faces conditional acceptance from China. The hope is to come to some resolution for the upcoming G-20 summit in Mexico. The only concern is how much is being asked of these countries without more firm European financial support. A U.S. Treasury spokesman said, “We continue to believe that the IMF can play an important role in Europe, but only as a supplement to Europe's own efforts. … The IMF cannot substitute for a robust euro area firewall.”
Always key indicators of domestic economic growth have been unemployment and jobs reports. In data released this morning, the number of jobless claims decreased more than 50,000. That has led to stocks opening on a much higher note in conjunction with the feeling that the Fed has done enough to insulate the American economy from the eurozone debt crisis. The S&P 500 has gained 4%, the most since 1987. James Dunigan, chief investment officer for PNC Wealth Management, echoed that sentiment, saying, “Europe is important, but it’s not the end of the world if they see a recession. … We’re starting to see that modest economic growth expectation for this year.”
At 8:11 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,660.30 – Down $1.10.
- Silver - $30.72 – Up $0.10.
- Platinum - $1,533.00 – Up $8.70.
- Palladium - $680.10 – Up $10.60.
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