Closing Gold & Silver Market Report – 11/11/2011
EURO ZONE WORKS TO AVOID MELTDOWN; U.K. PREPARES FINANCIAL CONTINGENCY PLAN
Between the posting of the Mid-Day Gold & Silver Market Report and now, the price of gold has risen slightly. For the week, despite declining prices the past two sessions, gold saw an overall gain of 1.8%. Michael K. Smith, with T&K Futures, indicated that gold seems to be returning to its more normal correlation with the U.S. dollar and U.S. stocks. Smith said, “When things go bad, everyone gets out of everything, and when things go well, everyone comes in to everything.” He added that for now, pessimism “has been maxed out.” Silver, platinum, and palladium all ended higher for the day and for the week.
Efforts are being made in the euro zone to avoid a financial meltdown, with the Italian Parliament putting a rush on passing austerity measures, and the new prime minister of Greece working to meet the bailout plan terms needed to avoid a Greek bankruptcy. Meanwhile, officials here in the U.S. are putting pressure on euro zone leaders to take dramatic action, with President Barack Obama having spoken directly to the heads of state of Germany, France, and Italy about the issue. U.S. Treasury Secretary Timothy Geithner is demanding that Europe take action quickly, saying in a statement, “The crisis in Europe remains the central challenge to global growth. It is crucial that Europe move quickly to put in place a strong plan to restore financial stability.”
News out of the United Kingdom is that the government is preparing a contingency plan to keep that country’s banking system going (including the Financial Services Authority, the Bank of England, and the Treasury) in the event that the euro collapses, an event that U.K. Business Secretary Vince Cable said would be “economic Armageddon.” With the European Commission cutting growth forecasts and predicting recession for Europe, U.K. Prime Minister David Cameron has warned that the euro zone is facing a moment of truth. Many ministers in the U.K. expect that when the Office for Budget Responsibility reports this month, there will be a severe downgrade of the country’s growth and public finances. Cameron has repeatedly called for Germany to permit the European Central Bank (ECB) to become a lender of last resort in order to rescue suffering economies in the euro zone. In a speech Thursday, Cameron said, “Italy is the third-largest country in the euro zone. … Its current state is a clear and present danger to the euro zone, and the moment of truth is approaching. If the leaders of the euro zone want to save their currency, then they, together with the institutions of the euro zone, must act now. The longer the delay, the greater the danger.”
At least 18 people were killed in Syria today as thousands of protestors took to the streets in an effort to pressure the Arab League into suspending the membership of Syria’s government. Protestors say that the government’s armed crackdown on the political uprising that has been going on in Syria for the past eight months is in violation of an Arab League-brokered initiative to put a stop to the violence.
At 4:02 p.m. (CST), the APMEX precious metals spot prices were:
· Gold - $1,790.70 - Up $29.10.
· Silver - $34.74 - Up $0.59.
· Platinum - $1,647.10 - Up $19.80.
· Palladium - $663.00 - Up $13.20.