Mid-Day Gold & Silver Market Report – 4/19/2012
DOLLAR GAINS; EURO CONCERNS DEEPEN
Precious metals had their share of volatility this morning. The dollar is again on the rise due to the volatility of the eurozone. Daniel Briesmann said, “Gold is moving in line with 'riskier' asset classes, and given higher risk aversion and growing uncertainty, prices are moving lower. … And since the dollar is stronger again today, that’s also weighing on the price of Gold.” However, LGT Capital Management's Bayram Dincer said the eurozone debt crisis “is just one variable in the Gold equation going forward. The other is the Fed’s upcoming meeting. That will be the next factor to determine the future direction for Gold.” And in a report, a bank official wrote that Standard Bank “still favors Gold.”
International Monetary Fund Managing Director Christine Lagarde’s call for additional financial support has been answered with an additional $320 billion added to the fund’s reserves by Japan, Denmark and Switzerland recently. Eurozone policymakers have recently increased their own firewalls to total more than $1 trillion and now look to boost the IMF to try and calm the nerves of the global financial markets. The call for support is actually less than what originally was sought due to the prevailing feeling that European nations really need to get themselves right before needing additional support. M.I.T.’s Simon Johnson, a former IMF chief economist, said, “The Europeans have to fix their own problems. Bailing them out, protecting them with generous money from outside, will not help them make progress.”
A key political figure, French President Nicolas Sarkozy, looks to be losing popular support just as eurozone concerns mount. Sarkozy has always been viewed favorably in international circles and has been a bit of a showman to some. The general feeling is he has lost touch with what got him elected previously among common citizens. However, the French election is not viewed as a slam dunk in either way. Jean-Thomas Lesueur, head of Thomas More free market think tank, said, “We are in an extremely serious economic and financial situation, and nobody on the right or the left explained this properly during the campaign. As usual, France went into a bubble and didn't broach the serious issues. As soon as the election is over, reality will explode in our faces like a grenade, and the erosion of public finances will be the big issue for the next president.”
At 1:21 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,642.80 - Up $2.70.
- Silver - $31.87 - Up $0.32.
- Platinum - $1,578.80 - Up $0.60.
- Palladium - $663.30 - Up $5.00.
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