Closing Gold & Silver Market Report – 9/6/2011
BERNANKE SAYS RISK TO U.S. BANKS IS SMALL
Precious metals prices have been basically flat since the Mid-Day Market Report, with gold and silver only swinging very slightly to the downside. Stocks have pared losses this afternoon after losing as much 2.9% earlier in the day. Many investors are still seeking a safe haven, keeping gold steady despite the late uptick in U.S. stock markets.
Europe’s ongoing sovereign debt crisis continues to hold the attention of traders. However, according to Ben Bernanke, the risk to U.S. banks is small. In total, estimates place the risk to U.S. banks at $200 billion, most in the form of credit default swaps, a kind of insurance policy sold by the banks against default by a borrower. In this case, the borrowers are the European nations of Ireland, Portugal, and Greece.
A common question from precious metals investors is, “Why is gold higher than platinum?” While platinum normally trades at a higher price than gold, platinum is an industrial metal. With manufacturing down, demand for platinum is lagging, while gold has a strong demand as a safe haven investment. Jonathan Butler, Publications Manager at Johnson Matthey, explains, “What we tend to see is that as the gold price moves higher, we also get a higher platinum price apart from at certain times when there's that kind of risk averse mentality.”
At 4:10 PM (CT) the APMEX precious metal prices were:
- Gold price - $1,878.30 – down $0.60.
- Silver price - $42.12 – down $1.02.
- Platinum price - $1,856.50 – down $29.30.
- Palladium price - $754.70 – down $28.50.