Mid-Day Gold & Silver Market Report – 11/21/2011
LACK OF RESOLUTION HURTS MARKETS; NUCLEAR CONCERNS RISE
Precious metals prices have declined since the Morning Gold & Silver Market Report. This is primarily a move to cash by investors based on much uncertainty in the markets, globally and domestically. Despite the drop in prices, strategists including Anne-Laura Tremblay of BNP Paribas say the outlook for gold is “boosted by its safe-haven status in an environment of heightened uncertainty. In the near term, gold should continue to outperform the rest of the precious metals complex.”
The biggest issue facing domestic investors now is the failure of the congressional Super Committee to reach any consensus on how to proceed to trim the budget. Though talks are ongoing, very little is expected in terms of resolution. Stock markets are plunging on the expected failure. Although expectations were already low that a resolution would come to pass, the U.S. was viewed as a safe haven from the eurozone debt crisis, but the failure reminds investors how risky our domestic political situation is to markets as well. Michael Gapen, a senior U.S. economist with Barclays Capital, said, “As is the case with policymakers in Europe, U.S. politicians need to be doing more than investors expect, not less.”
In other concerning global news, Britain’s financial institutions have halted all financial operations with their Iranian counterparts, including the central bank of Iran. The concerns revolve around Iran’s increasing nuclear capabilities, adding a military dimension that is concerning the U.K. and the U.S.George Osborne, U.K. finance minister, said, “We believe that the Iranian regime's actions pose a significant threat to the U.K.'s national security and the international community. Today's announcement is a further step to preventing the Iranian regime from acquiring nuclear weapons.” A U.S. official said the Treasury Department planned to designate Iran an area of “primary money laundering concern”, which would allow the U.S. to take steps to isolate the Iranian financial sector.
At 12:03 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,676.60 – Down $50.50.
- Silver - $31.00 – Down $1.47.
- Platinum - $1,544.50 – Down $44.20.
- Palladium - $587.00 – Down $20.10.