Closing Gold & Silver Market Report – 8/15/2011
US STOCKS RALLY TODAY; GERMAN CHANCELLOR RESISTS SO-CALLED “EUROBONDS”
Since the Mid-Day Gold & Silver Market Report posted by APMEX at 1:15 PM, the spot price of gold has risen from $1,769.00 to $1,770.50 (up $25.90 overall for the day) and the spot price of silver has risen from $39.69 to $40.04 (up $0.82 for the day).
Reversing the massive drop seen last week, U.S. stocks rallied today amid news of some major mergers and acquisitions, including a plan by Google to purchase Motorola Mobility and Time Warner Cable’s intention to acquire Insight Communications from the Carlyle Group. The Dow rose 213.88 points and the S&P gained 25.68 points in response, although both indexes are still lower than usual for this time of year and August looks like it could end as the worst month for the indexes since May of 2010. Art Cashin with UBS Financial Services indicated that today’s rally might also be the result of investors with misplaced optimism about Tuesday’s meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy about the euro zone debt crisis, saying, “…they might have their hopes too high [as] they’re hoping something can be worked out.” Cashin also offered a warning, stating, “What we’re seeing right now is a rebound, but if you go back to the ‘87 crash, we rebounded 6 percent the next day and 10 percent the day after that, but by December, we were headed back for another low. So you want to be very careful.”
Speaking of the euro zone debt crisis, German Chancellor Merkel is feeling the pressure from some business groups in Germany to push for an issuance of what some are referring to as “Eurobonds,” which would be bonds issued jointly by euro zone countries. Many experts are saying that such a common bond issuance would allow euro zone members to borrow at affordable rates, thereby solving the current debt crisis. However, the German government is strongly against the idea of issuing “Eurobonds,” fearing that such a move would increase borrowing costs for Germany while also reducing the incentive for troubled euro zone countries (such as Greece) to make necessary economic reforms. A spokesman for the German government insisted that there would be no discussion of such jointly issued bonds during the meeting between Chancellor Merkel and President Sarkozy tomorrow.
At 4:43 pm (CT), the APMEX precious metals spot prices were:
· Gold - $1,770.50 - Up $25.90
· Silver - $40.04 - Up $0.82
· Platinum - $1,811.50 - Up $14.80
· Palladium - $751.60 - Up $1.40