Closing Gold & Silver Market Report, 6/20/2012
‘TWIST’ A LITTLE LONGER; PRECIOUS METALS THE DANCE PARTNER?
Although quantitative easing (QE) was not announced, the extension of the Fed’s Operation Twist has dropped Precious Metals prices for the time being. The outlook for Precious Metals remains tied to any Federal Reserve indication of further QE, as well as the European economic situation. Adviser Bill O’Neill said, “At least for the near term, it’s mainly a short term negative for Gold because it indicates that there won’t be immediate and new aggressive accommodation, and certainly no QE3 at all judging from this statement.” However, in a note to its investors, Commerzbank analysts wrote, “It is quite possible, though, that the current June high at $1,641 will be surpassed this week and that the 50 percent retracement of the February to May decline and the 200 day moving average at $1,668 will be reached before another medium term down leg rears its head.”
Wednesday’s announcement led to a lot of market volatility, in both Precious Metals and the stock markets. Investors are concerned with European debt crisis resolution and the Operation Twist extension and what it really means to the markets. The Fed cut 2012 growth estimates, and concerns heighten over the unemployment data. However, further QE is not ruled out. Chief investment officer Eric Teal said, “It’s not all bad news, but caution is warranted. If the Fed saw significant deterioration, the policy response would have been on a larger scale. Yet there’s increased risk to the economic outlook.”
Greece finally has put together a coalition government behind newly sworn in Antonis Samaras and the promise from politicians to negotiate more agreeable terms so as to maintain the international flow of bailout money. Another crucial element that is damaged is the people’s dignity within Greece. After being sworn in, Samaras spoke to reporters and said, “I am fully aware how critical this time is for our nation. I know very well that Greek people are hurt and need to regain their dignity. I know that the economy must quickly recover to re-establish social justice and cohesion.” This is a truly daunting task that faces Samaras, putting together a cabinet, overcoming perceived political shenanigans and overcoming the economic tumult from previous leadership.
At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,608.70, Down $15.00.
- Silver, $28.18, Down $0.29.
- Platinum, $1,459.50, Down $23.00.
- Palladium, $621.00, Down $9.40.
APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.