Morning Gold & Silver Market Report – 9/7/2011
$300 BILLION GIFT TO JOBS FROM OBAMA
With U.S. stock futures gaining in overnight trading, precious metals have fallen. The jobs market is looking to get a boost from a reported $300 billion aid package that President Barack Obama is set to unveil in a speech to Congress Thursday. The package aims to add jobs to the economy via a mix of tax cuts, infrastructure spending, and aid to local governments. David Miller of Cheviot Asset Management explained that Obama has a fine line to walk in his speech. He said, “Although investors will need to listen very carefully because the risk of policy error is high, I suspect his words will be more radical than the actual solutions put forward and that he will do just enough to be able to pass the buck back to [Federal Reserve Chairman Ben] Bernanke for the Fed meeting…” which is scheduled in about two weeks.
Stocks are enjoying a boost globally thanks to a ruling out of Germany that the country’s involvement in the bailout of Greece was, in fact, legal. Along with this ruling, however, is a new law that mandates that Germany’s Parliament will have to vote to approve any future bailouts. ING economist Carsten Brzeski said, “Today’s ruling should bring some relief to financial markets as a total chaos scenario has been avoided but it should not lead to euphoria. The ruling confirms our view that the German piecemeal approach on the debt crisis is not likely to change but eventually the German parliament will vote in favor of a second Greek bailout package and the beefed-up [European Financial Stability Fund].”
Hedge-fund investor George Soros recently said that the lack of an authoritative ruling body over the eurozone has led to the European debt crisis being “worse than Lehman Brothers.” He then explained, “You need a crisis [like the current one] to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.” The lack of stability in the eurozone has recently caused shaky markets, increasing the appeal of safe-haven investments like gold.
At 8:09 am (CT) the APMEX precious metals spot prices were:
- Gold - $1,824.70 – Down $50.50.
- Silver - $40.83 – Down $1.11.
- Platinum - $1,827.80 – Down $31.40.
- Palladium - $747.90 – Down $1.60.