Mid-Day Gold & Silver Market Report – 2/10/2012
GREEKS PUSH BACK ON AUSTERITY
Precious metals prices have continued a downward slide after pushback was received in Greece’s Parliament over austerity measures put in place. Granted, the pushback is coming from minority party members, but at this point any pushback or non-implementation is going to be viewed as a negative. The tenuous situation has caused investors to sell the metal and hang on to cash. Bart Melek, head commodity strategist at TD Securities, said, “In a situation where the financial system may be at risk, people may need a lot of cash to buffer themselves against a potential shock such as a Greek default. … They may swap out Gold along with other assets for cash.” However, one thing investors might want to keep an eye on is the lowering of trading margins on precious metals by the CME Group, the largest operator of U.S. futures exchanges. When CME last increased margins in August and September, prices fell. This recent lowering could be viewed as a potential driver of prices.
The Greek Parliament has begun to push back on some of the conditions needed to get the next bailout. The problem: The Greeks already are balking ahead of the parliamentary vote, set for this weekend, spurred on by the German need for further cuts not included in the initial draft. German conditions are actually supported by other eurozone nations, including Luxembourg. Luxembourg Prime Minister Jean-Claude Juncker said, “In short: No disbursement without implementation. … We can’t live with this system while promises are repeated and repeated and repeated, and implementation measures are sometimes too weak.” The overall feeling in Greece is reiterated by members of Parliament. After a meeting with German Finance Minister Wolfgang Schaeuble, head of Greek Laos party George Karatzaferis said, “What has particularly bothered me is the humiliation of the country. … Clearly, Greece can’t and shouldn’t do without the European Union, but it could do without the German boot.”
At 12:29 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,724.50 – Down $15.70.
- Silver - $33.67 – Down $0.30.
- Platinum - $1,662.00 – Down $6.50.
- Palladium - $704.80 – Down $7.50.