Mid-Day Gold & Silver Market Report – 9/1/2011
DATA BOOSTS CONFIDENCE, GREECE STILL JEOPARDIZED
Since the Morning Gold & Silver Market Report, precious metals have generally stayed the course. Gold has slipped a little based on hope of another round of quantitative easing, as well as the better-than-expected manufacturing and jobs data.
This morning most analysts had predicted a drop below 50 on the Institute for Supply Management (ISM), but were pleased to see the reading still above 50. This does not mean recession fears will suddenly dissipate, but it is definitely more confidence-inducing to see a projected drop in jobless claims and better-than-expected manufacturing data. According to John Silvia, Chief Economist at Wells Fargo in Charlotte, NC, "The net result is a slowdown, disappointing growth for the third quarter but not a recession."
Any European rescue is facing some serious political issues. To put it into perspective, the United States has (for the most part) a two-party system. The euro zone has 17 different governments to account for. Finland has stepped out and wants to protect itself in any deal; others will most surely follow. The fund for protection is called the European Financial Stability Facility (EFSF). There are still hurdles in place that threaten the Greek bailout, especially the demands for collateral from some of the other governments in the euro zone. “The final construct just looks so far away now, it’s eroding the fund’s effectiveness when it finally gets up and running,” said Julian Callow, Chief European Economist at Barclays Capital in London. “The political squabbling is doing it a great disservice.”
At 12:07 PM (CT) the APMEX precious metals spot prices were:
- Gold - $1,830.30 – down $3.20.
- Silver - $41.73 – down $0.11.
- Platinum - $1,854.20 – down $3.00.
- Palladium - $790.00 – down $0.50.