Closing Gold & Silver Market Report, 6/22/2012
EUROZONE SUPPORTS GROWTH; BANKING STOCKS RALLY
Precious Metals prices remained volatile but ultimately ended up fairly even Friday, with Gold closing higher. Despite the credit downgrade of banks globally, banking stocks rallied, and the support of growth in the eurozone has helped boost some prices. Broker Phillip Streible said, “There is zero inflation out there. With Gold being well received as a risk asset, the price is deflated because of the rising dollar.” There is a sentiment that investors will continue to rebuild Gold positions based on the price pullback over the past few days.
After a high level meeting today in Rome, the leaders of France, Italy, Spain and Germany came to an initial agreement to support a growth initiative in the eurozone. They agreed to contribute about 130 billion euros to support the growth. Italy’s Prime Minister Mario Monti said, “Growth can only have solid roots if there is fiscal discipline, but fiscal discipline can be maintained only if there is growth and job creation.” Dissent over euro bonds continues. French President Francois Hollande supports the measure, while German Chancellor Angela Merkel continues her dissent on the topic. In a shot across the bow of Germany, Hollande said, “I consider euro bonds to be an option … but not in 10 years. There can be no transfer of sovereignty if there is not an improvement in solidarity.”
The banking downgrades had very minimal impact to the markets, as American stocks continued their upward trend today. Strategists and analysts agreed the effect was minimal. Strategist Jeffre Saut, “The bad news is out, and it was not as bad as expected. … They had been telegraphing the bank downgrades for a long time. Why does anybody pay any attention to those rating companies? They missed it during the financial crisis.” Analyst James Leonard said, “The banks have gotten so much better in the last few years in terms of capital, yet their ratings keep going down. What does that tell you? That the ratings were so wrong before.”
At 5:15 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,571.60, Up $7.60.
- Silver, $26.93, Down $0.02.
- Platinum, $1,436.90, Down $3.70.
- Palladium, $611.10, Up $1.60.
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