Mid-Day Gold & Silver Market Report – 8/12/2011
A 30 year old low has been reached as the preliminary index of consumer sentiment slumped to 54.9. The projected number was 62 as of this morning but the official report has a much wider margin. The weak employment data and volatility in the markets lead a lot of economists to believe consumers will regroup and wait for a blow over. The low job gains and elevating gas prices are increasing the risk of slower than expected economic growth. Donnie Smith, Chief Executive Officer of Tyson Foods Inc., said, “Unemployment’s still over 9 percent, gas prices continue to take a bigger piece of disposable income with the average price of unleaded peaking at almost $4 a gallon in May…These macroeconomic factors have, of course, affected consumer behavior in both the foodservice and the retail channels.”
Italy is set to announce tough austerity measures to avoid a Greek-like emergency. The issue with Italy is more that its economy is actually too big to bail out. The bailout would exceed the European Central Bank’s bailout mechanisms. An emergency meeting with Prime Minister Silvio Berlusconi is set within the next couple of hours (1 PM ET). There continue to be concerns as well that the euro zone debt crisis has reached France. In the midst of the European holiday season, the fear of a downgrade to France’s AAA rating, has led President Sarkozy to return from vacation to offer up France’s own austerity measures. The major question this brings up, especially since France is viewed as a twin pillar with Germany, according to Morgan Stanley economist Olivier Bizimana, is "The implicit hypothesis is that the countries that have the financial means to support the countries that are in trouble do not run into difficulties themselves.”
At 12:04 pm (CT) the APMEX precious metals spot prices were:
- Gold – $1,742.80 – Down $10.90.
- Silver – $39.02 – Up $0.24.
- Platinum – $1,797.10 – Up $4.70.
- Palladium - $749.30 – Up $13.40.