STOCKS PARE LOSSES AFTER GREEK CONFERENCE CALL; OBAMA UNVEILS DEFICIT PLAN
Between the Mid-Day Gold & Silver Report and the posting of this report, precious metals prices have continued to slide, ending the day at a three-week low as investors cashed in their gold. Brien Lundin, editor of Gold Newsletter, called the actions in today’s session “reflective of a ‘risk off’ day,” adding, “Greece is back in the headlines, and the market is beginning to accept the inevitability of a default, which has prompted speculators to close positions and run for safety.”
After renewed fears earlier in the day over a Greek default, news about a “productive and substantive” conference call between international regulators and Greece’s Finance Ministry helped pare down losses in U.S. stocks this afternoon. Earlier in the day, the S&P 500 was down by 2.3%, but that narrowed to 1% by the 4:00pm market closing. Details on the conference call were vague, although Greece did say that officials on the call discussed the country’s eligibility for next month’s scheduled aid payment, as well as whether Greece is on the correct path for a second rescue package. According to Greek officials, there will be another conference call tomorrow to discuss the matter.
The $3 trillion deficit plan devised by President Obama was unveiled today, featuring a heavy emphasis on increased tax revenues from the wealthy. In remarks made today, the President stated, “"I will not support any plan that puts all the burden on closing our deficit on ordinary Americans. We are not going to have a one-sided deal that hurts the folks who are most vulnerable." The President’s comments referred to the idea, often repeated during today’s remarks, that all Americans should pay a “fair share” of taxes, as well as his vow to veto any Medicare cuts unless Congress raises taxes on the wealthy and corporations. Republican leaders were dismissive of the President’s plan, deriding it as a political stunt that is unlikely to ever be made into law. In response to the plan, Mitch McConnell, Republican Senate leader, stated, “Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth,” while Potomac Research Group’s chief political strategist Greg Valliere said, "This is purely politics, aimed at Obama's demoralized base. It undoubtedly has been poll-tested, so now Obama has a populist campaign issue. There's obviously no chance this could pass (on a vote in Congress)."
At 4:15 PM (CT), the APMEX precious metals spot prices were:
· Gold - $1,779.50 - Down $33.70
· Silver - $39.73 - Down $1.12
· Platinum - $1,778.00 – Down $38.90
· Palladium - $719.00 - Down $17.90
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