Mid-Day Gold & Silver Market Report – 1/20/2012
CLOCK TICKING FOR GREECE; HOUSING MARKET MAY DRIVE U.S. RECOVERY
As the Chinese New Year approaches, Gold buying demand in China has slowed. Gold’s performance next week is likely to be unpredictable, as Chinese markets will close for the holiday and not reopen until Jan. 30. However, China’s demand has not had a huge effect on the price of Gold, which is up slightly since this morning. The price rise is due to the expectation that Greece and private creditors will reach an agreement, which would boost the euro. In a note, Commerzbank officials wrote, “There remains a high risk of an outright insolvency of Greece in the coming months, which could bring the sovereign-debt crisis back to boiling point. We therefore believe that demand for Gold will remain high.”
Today, Greek officials met with private bondholders to finalize a deal that will prevent Greece from defaulting. It is expected the private bondholders possibly could incur a real loss as high as 70 percent. Greece has until Monday to reach an agreement, but finalizing any deal is expected to take weeks. A Greek government official said, “The deal must be completed. There is no more time left.” Bob Parker at Credit Suisse said, “There are two fundamental failures in the eurozone at the moment.” First is a lack of political will to add additional funds to the European bailout fund, and second is a nonexistent growth strategy for Europe.
A true economic recovery this year in the U.S. is promising, thanks to an improved housing market. Homes are affordable, and the labor force is growing based on reports of a lower unemployment rate. Lawrence Yun of RBS Securities said, “December was a nice finish to a tough year in 2011. If that can be sustained, we are talking about a genuine recovery in 2012.”
At noon (CST), the APMEX precious metals spot prices were:
- Gold - $1,665.40 – Up $9.40.
- Silver - $31.59 – Up $1.00.
- Platinum - $1,533.10 – Up $14.10.
- Palladium - $676.40 – Down $3.00.