Morning Gold & Silver Market Report – 7/19/2011
GOLD FLAT AS DEBT CEILING, EUROZONE ISSUES REMAIN
The doors to compromise finally seem to be opening in debt ceiling negotiations. More details have arisen about behind-the-scenes deals that are in the works. The game of politics is still very much in play, but at least one deal is looking to give President Obama the power to raise the debt ceiling himself if the two sides cannot come to an agreement. In allowing that, Republicans can avoid the blame of failing to raise the debt ceiling while never actually voting for it. Obama’s imposed deadline for a deal to raise the debt ceiling is just three days away, and the potential day of default is a mere two weeks away.
Gold is fairly flat today as the euro rises. Investors seem to be showing more risk appetite after the single currency dipped to record lows against the Swiss franc (which, like gold, is often seen as a safe haven store of value) yesterday. An economic sentiment survey in Germany fell, showing that the ongoing debt problems in the eurozone are having an adverse effect even in its strongest economy.
Strong demand for gold in India has been supporting prices and has gone largely unnoticed. The Indian people, like the Chinese, are seeing gold as a way to protect their wealth in times of high inflation. The World Gold Council recently said that 58% of first-quarter demand for physical gold was from these two countries. Over the past thirty years, gold prices have typically eased in the summer amid quiet trading. Since the beginning of June, however, gold is up 4.5%.
At 8:00 am (CT) the APMEX precious metals spot prices were:
- Gold – $1,603.70 – Up $0.30 on the day.
- Silver – $40.41 – Flat.
- Platinum – $1,776.50 – Up $1.10.
- Palladium - $795.00 – Down $1.60.