Mid-Day Gold & Silver Market Report – 7/7/2011
GOLD BENEFITS FROM FLIGHT TO QUALITY
Precious metals are trading steadily today, with silver making a small gain, after news of jobless claims falling by 14,000 to 418,000. Oil also rose after the jobless data was released with lower than expected numbers. Ironically, despite lower jobless claims, consumer confidence in the U.S. fell from its highest level in over 10 weeks based on the Bloomberg Consumer Comfort Index. This rating was due in part by the fact that though the jobless claims are less, the U.S. is still over 9% unemployment, which combined with the limited wage growth and poor housing market, has left consumers frowning upon the status of America’s financial growth. For the first time in three sessions, the euro rose against the dollar after European Central Bank President, Jean-Claude Trichet, commented on Portugal’s debt, which has reinforced concerns that the crisis could spread.
Earlier this morning, PIMCO chief Mohamed El-Erian participated in a Q&A on Reuters to answer questions about where the economy could be headed, the things to watch this quarter (i.e. the Middle East, China and South Africa), as well as his opinions on the current debt crises. He kept referring to the safety of gold during these critical times, referencing the central banks’ increase in gold purchases. "The likely consequences [of a U.S. default] for markets would include a simultaneous sell off in equities, bonds and the currency. Gold would most likely benefit from the flight to quality."
At 12:00 pm (CT) the APMEX precious metals spot prices were:
- Gold – $1,529.90 – Up $0.30 on the day.
- Silver - $36.47 – Up $0.50.
- Platinum - $1,739.00 – Up $5.60.
- Palladium - $786.00 – Up $10.80.