Morning Gold & Silver Market Report – 10/26/2011
SAFE-HAVEN STATUS ‘RE-EMERGING’ AS EURO UNCERTAINTY REMAINS
In overnight trading, gold, silver, and platinum all rose slightly while stock futures gained sharply ahead of a summit of EU leaders taking place today. Investors seem to be expecting, or at least hoping, that a comprehensive plan will come out of the summit which will deal with the euro zone debt crisis. German Chancellor Angela Merkel is expected to lead the charge at the summit, as she hopes to beef-up the European Financial Stability Facility to over 1 trillion euros, and come up with a plan to recapitalize European banks. Also on tap is finally getting Greece’s debt burden under control.
The latest report to come out of Greece is that private bondholders are now expected to share 50% of the burden from Greece’s debt. It’s uncertain how the other half of the burden will be handled, but this is a significant increase from what was originally agreed upon months ago. However, indications are that it will remain a voluntary ‘haircut,’ though some aren’t buying in to that just yet.
Gold seems to have firmly recaptured the $1,700 level, as it becomes clear that some investors aren’t sold on the EU summit finally solving the euro zone debt puzzle. Analysts in London said in a report, “The size of the debt issues [is] unlikely to go away regardless of what policymakers decide. Given this uncertainty, we are not at all surprised gold is attracting fresh safe-haven buying.” Natalie Robertson of Australia & New Zealand Banking Group Ltd. added, “Safe-haven status is re-emerging. Sentiment is still very, very fragile at the moment and today will continue to be uncertain. Everyone’s waiting on the developments out of Europe.”
At 8:00 am (CT) the APMEX precious metals spot prices were:
- Gold - $1,715.20 – Up $12.80.
- Silver - $33.46 – Up $0.37.
- Platinum - $1,582.40 – Up $13.60.
- Palladium - $651.70 – Down $2.40.