Morning Gold & Silver Market Report – 8/29/2011
Record Prices Only Increase Chinese Demand for Gold – Chinese investors are putting even more money into gold bars as gold prices rise. August is typically a slow month for Chinese jewelers, but many shops polled by Reuters in Shanghai are reporting solid gold sales for the month. "The surge in prices has sparked another gold-buying craze. The 50 gram and 100 gram gold bars were selling like hot cakes," said Ms. Liu, a store manager at Shanghai's major jeweler Lao Feng Xiang, who said gold sales this month were up at least 30 percent from a year ago.” China is rapidly gaining on India as the world’s leading consumer of gold and according to recent data from the World Gold Council, these two countries make up 52% of the world demand for gold.
Precious metal prices rose across the board, when Asian markets opened Sunday at 5PM (CT). They have continued to hold their gains overnight. U.S. stock futures are up sharply, as the damage from Hurricane Irene is apparently less than what was feared on Friday.
Alpha Bank SA, Greece’s third largest bank is buying Eurobank Ergasias SA, thus creating Greece’s largest lender. This merger is seen as an important step in strengthening the private sector economy and deters the nationalization of Greek banks. Alpha Bank rose 30% and Eurobank rose 29% on the Athens Exchange, which pulled the entire banking industry up along with them. Greek stocks also climbed to its best gain in more than 20 years.
Central bankers are becoming more alarmed that after four years of pumping money into the system, the global economy is still teetering and central bank policies are ill-equipped to help. Christine Lagarde, the International Monetary Fund’s new Managing Director said on Saturday, "We risk seeing the fragile recovery derailed. Those risks have been aggravated, she said, by the publics’ sense that policy makers' response has been inadequate. "We are in a dangerous new phase." There is a growing concern that the U.S. and Europe could fall into another recession before completely coming out of the one they just experienced.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,817.60 – up $18.40
- Silver price - $41.22 – up 15 cents
- Platinum price - $1,840.80 – up $12.90
- Palladium price - $761.50 –up $3.40