Morning Gold & Silver Market Report – 2/22/2012
GOLDMAN SACHS SEES SLOW U.S. GROWTH, HIGHER GOLD PRICE IN 2012
Precious metals are experiencing mixed trading this morning, with Gold and Palladium relatively flat, Silver down about 1 percent, and Platinum up about 1 percent. For Gold, the concerns over the state of European debt have brought down the value of the euro. Sharps Pixley Chief Executive Ross Norman said, “Every time we have another package (for Greece) agreed or more concessions wrung from investors, there is an ever more muted cheer. Cynicism is creeping in, and that is affecting the Gold price.” Goldman Sachs reaffirmed its position that the 12-month view for Gold is a positive one, crediting the expectation that “U.S. real interest rates (will) remain lower for longer given our U.S. economics team’s expectation for U.S. economic growth to remain slow through 2012.” The firm stated that $1,940 is a likely target for Gold in 2012.
U.S. stock futures are flat, and economists expect that many stock investors are fully invested after Tuesday’s rally. The main concern with stocks is no different than that of precious metals: the European debt crisis. The eurozone purchasing managers index released this morning showed an unexpected drop in production in the region, suggesting that a slide back into recession could occur. Adding fuel to the fire, Fitch Ratings again cut Greece’s sovereign debt rating and said that a default by the country is “highly likely in the near term.”
History seems doomed to repeat itself in Syria, where bombing of the city of Homs by government forces killed 19 people overnight, including two Western journalists. The death toll in Homs recently is in the hundreds. Syrian President Bashar al-Assad may be following in his father’s footsteps; then-President Hafez al-Assad did the same thing in the city of Hama 30 years ago and killed at least 10,000 of his own citizens. The U.S. has hinted that it may begin to support the opposition if a political solution to the situation is unattainable. Russia remains one of Assad’s few allies, and tensions are growing to stop the violence.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,753.50 – Down $4.00.
- Silver - $34.14 – Down $0.36.
- Platinum - $1,702.60 – Up $16.70.
- Palladium - $715.10 – Up $3.40.