GREEK STOCKS SHOOT UP, BUT FINLAND WANTS COLLATERAL; CHINA’S GOLD BUGS KEEP BUYING
Gold closed out the day lower than it had last Friday, after experiencing both highs and lows that brought the price per ounce up over $1,840 per ounce and down to nearly $1,781 per ounce during intraday trading. Gold futures for December delivery ended down $5.70 for the day. Silver, platinum, and palladium all ended the day down slightly as well. U.S. stocks experienced a jump, with the S&P 500 enjoying its first weekly gain since last month, with investors seemingly relieved over Hurricane Irene’s less-than-expected damage quotient and Fed Chairman Ben Bernanke’s lack of indication of any plans for more quantitative easing.
In response to the news of a merger between two prominent Greek banks, Alpha Bank SA and EFG Eurobank Ergasias SA, stocks in Greece shot up to a 21-year high. The banks, which plan to join together and sell new equity, both saw jumps of 30%, while other banks in Greece saw gains as well. Meanwhile, Jean-Claude Trichet, president of the European Central Bank (ECB), is pushing governments in the Eurozone for quick action on implementing the Greek bailout agreement that was reached on July 21st of this year. In comments made to the European Parliament's economic affairs committee, the ECB president stated, “The full and timely implementation of the July 21 agreement between heads of state or government is of essence.” However, something that could delay such an implementation is Finland’s demand for collateral in exchange for making loans to Greece. Talks are being held between officials from Germany and Finland in an attempt to reach a compromise.
According to Reuters, Chinese investors, instead of being deterred by gold’s recent record prices, have aggressively spent money on the precious metal, buying up gold bars and bullion-based derivatives. During the month of August, in what is usually a slow month, Chinese jewelers reported uncharacteristically solid sales of gold despite the price increases of the past few months. A store manager for Lao Feng Xiang, a major jeweler in Shanghai, explained that gold sales have increased at least 30% over sales for same time last year, saying, “The surge in prices has sparked another gold-buying craze. The 50 gram and 100 gram gold bars were selling like hot cakes.” The popularity of gold in China will likely continue to influence the price of gold in the future.
At 4:15 PM (CT), the APMEX precious metals spot prices were:
· Gold - $1,792.50 - Down $6.80
· Silver - $41.03 - Down $0.05
· Platinum - $1,827.90 – No change at $0.00
· Palladium - $757.60 - Down $0.50
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