Morning Gold & Silver Market Report – 06/22/2011
GREEK PARLIAMENT GETS CONFIDENCE VOTE BUT STOCKS BACK OFF AS METALS CLIMB
As expected, the recently reshuffled Greek parliament survived yesterday’s confidence vote. Now that the first small hurdle has been cleared, a much larger hurdle looms on June 28. This is the date the parliament must approve a package of spending cuts, tax increases and state asset sales in accordance with the bailout conditions imposed by the European Union (EU). These measures must be implemented by July 3rd in order to secure 12 billion euros, ($17 billion USD), and avoid bankruptcy.
The precious metals and equity markets rose yesterday in anticipation of an affirmative vote of confidence in Greece. Overnight, world stock markets began to give back and US stock futures are set to open lower, as investors remain concerned on the current and long term uncertainty. One person who is not uncertain is PIMCO’s Mohamed El-Erian. He flatly predicts that Greece and other European economies will go into default. His concerns are that nothing has been done to enhance growth, there are no indicators showing strength in Greece and this bailout is more about saving European banks than saving Greece. As stated over the weekend, this is just throwing good money after bad and it will be a waste of good money.
Fed Chairman Ben Bernanke is scheduled for his second news conference today at 1:15 PM (CT). This conference will follow the Fed statement at 11:30 AM (CT). It is widely expected that no major change will be announced at 11:30, but during the news conference, investors will hang on every word for indications of future Fed actions in the financial marketplace.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,551.70 (up $4.80)
- Silver price - $36.52 (up 5 cents)
- Platinum price - $1,751.40 (up $3.20)
- Palladium price - $770.00 (up 80 cents)