Closing Gold & Silver Market Report – 7/28/2011
EXECUTIVES PRESSURE WASHINGTON ON DEBT DEAL; MOODY’S WARNS OF DOWNGRADE CONSEQUENCES
Pressure to come up with an agreement on raising the federal debt limit is being put on Washington lawmakers by the top executives from some of the country’s most prominent financial institutions. In a letter released today, executives from Goldman Sachs, JPMorgan Chase, and Bank of America cautioned that the consequence of not raising the debt ceiling by the August 2nd deadline “would be very grave.” The letter also warned that a default by the U.S. and any credit rating downgrades would damage the confidence of investors and raise interest rates for anyone who borrows.
Moody’s Investors Services is warning that a downgrade of the U.S.’s AAA credit rating could result in a similar cut to the Aaa rating of a large number of other organizations including local state governments, school systems, housing programs, and at least one university. In all, 177 entities have been placed on a ratings review by Moody’s, with the agency stating, “In the event the U.S. government's Aaa rating is downgraded, Moody's will determine the outcome of each review by evaluating the strength of the sovereign linkages to each affected credit, including direct and indirect reliance on federal spending, sensitivity to deteriorating macroeconomic conditions and vulnerability to disruptions in the financial markets."
At 5:15 pm (CT), the APMEX precious metals spot prices were:
- Gold - $1,618.10 – Up $2.90
- Silver - $39.85 – Down $0.01
- Platinum - $1,790.10 – Down $17.90
- Palladium - $831.70 – Down $3.50