Morning Gold & Silver Market Report – 11/3/2011
The Greek Government Could Be Heading for Collapse – Precious metals prices are moving upward as stocks are set to open flat. The European debt crisis took a strange turn several days ago when Greece said it had to think about accepting 50% forgiveness on its debt and an additional $130 billion euro loan. Now, it has turned even stranger, after defections from the ruling party have left Prime Minister Papandreou without a majority. There is the beginning of a groundswell to force Papandreou’s resignation.
The latest Greek development is fueled by tensions between the prime minister and the finance minister. Finance Minister Evangelos Venizelos is gaining support in opposing a referendum on whether to accept the bailout offered by the European Union. The opposition party believes that Greece must stay within the European Union. The finance minister has always favored austerity measures, but 60% of the Greek population views the deal as negative. This could lead to the total collapse of the government. Stay tuned as events might unfold quickly.
In a surprise move, the European Central Bank just announced it is reducing its main interest rate to 1.25%, as its concerns about the debt crisis have trumped its concerns about inflation. Markets will now be looking to new bank President Mario Draghi for any hints that further interest rate cuts might be in the future. Gold and Silver prices jumped up a notch on the news.
At 8AM (CT) the APMEX precious metals prices were:
- Gold price - $1,767.20 – up $35.60
- Silver price - $34.89 – up 92 cents
- Platinum price - $1,645.00 – up $43.70
- Palladium price - $675.90 – up $25.30