Closing Gold & Silver Market Report, 7/10/2012
TRADERS PUNISH EURO AS BLACK CLOUD SWIRLS OVER EUROPE
The euro fell in value today when compared to 16 of its most-traded peer currencies. Recent interest rate cuts by the European Central Bank have led traders to rid their portfolios of euro assets in favor of currencies with higher yields. This has happened despite the success of eurozone leaders in organizing a rescue package for ailing Spanish banks, as well as planned possible aid for the cash strapped government of Italy. Overall, the euro has lost 2.5 percent of its value in the last month, which is traditionally a large move in currency markets, although recent volatility has made such moves more common. The American dollar gained strength, which helped push Precious Metals prices down.
The Federal Reserve is still open to more fiscal stimulus, a point made by San Francisco Fed President John Williams. Speaking to reporters in Coeur D’Alene, Idaho, Williams said, “We are right at that edge, that if economic data keep coming in below our expectations -- and our view is we are not making progress on our mandates, or we don't expect to make progress on our mandates -- then I think we would need more accommodation.” Williams cited possible methods of stimulus, including the purchase of mortgage backed securities in an effort to support a still floundering American housing market. Williams also stated that he would support further stimulus even at the risk of causing inflation to rise higher than the Fed’s target.
At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,567.90, Down $22.70.
- Silver, $26.84, Down $0.67.
- Platinum, $1,424.70, Down $21.20.
- Palladium, $576.00, Down $8.90.
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