Morning Gold & Silver Market Report – 11/7/2011
Gold & Silver Up as All Eyes Are on Italy - Greece has decided to accept a bailout. Although this is far from a solution, it does clearly set the focus on Italy. Italy is the region’s third-largest economy, and concerns on whether Italy can get its economic house in order continue to rattle the markets. Markets had rallied on the rumors that Italian Prime Minister Silvio Berlusconi was set to resign, but Berlusconi has denied these rumors, sending equity markets down. The Italian 10-year bond is the center of attention. It has now climbed to 6.67%, which is viewed as a rate the Italian government may not be able to pay. Italy has one of the world’s highest public debts. If interest rates on the 10-year bond get to 7%, most analysts would consider it unsustainable.
The European Financial Stability Facility (EFSF) will not be getting any of Germany’s gold. The EFSF is a vehicle set up to collect funds from the European countries that do not need a bailout to help those that do. It was reported that leaders at the Group of 20 conference in Cannes, France, suggested to Germany that its gold reserves could be used to underpin the EFSF. Senior German officials immediately rejected this plan. Germany will be required to put in euros, but it will not be giving up any of its gold.
At 8 a.m. (CST), the APMEX precious metals prices were:
- Gold price - $1,779.00 – up $20.80.
- Silver price - $34.61 – up $0.40.
- Platinum price - $1,638.00 – up $8.70.
- Palladium price - $660.90 – up $3.60.