Closing Gold & Silver Market Report – 11/23/2011
EUROPEAN COMMISSION REQUESTS EUROBONDS TO BE BACKED BY GOLD
Precious metals have remained steady from earlier trading as we head into Thanksgiving. News of the German bonds have put an even more negative light on the situation in Europe and stocks tumbled as a result. Chinese manufacturing activity was down in November, its lowest in 32 months, spurring deflationary fears and pushing the dollar higher making gold buying more expensive.
The news that Germany (along with other European countries) was unable to get needed loans has pushed the European Commission into discussing the possibility of eurobonds with gold collateral, along with pleas for the European Central Bank to lend the funds or start printing money in a last-ditch effort. Ross Norman of SharpsPixley, says, “If Europe sinks then it would impact all currencies and be a positive for gold.” Adding that he feels gold’s inverse correlation to currencies (especially the U.S. dollar) could disappear, setting new standards and causing a “considerable rally in the gold price.” Norman argues that if the eurobonds used gold as a collateral, it would ultimately be a positive for gold, saying, “It highlights the fact that it is the asset of last resort…gold is the asset that holds it value and it underlines gold’s incredibly important roll.
Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, commented on the German bond crisis earlier today, saying, “This auction is nothing short of a disaster for Germany. If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”
At 4:00 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,695.00 – Down $9.40.
- Silver - $31.74 – Down $1.26.
- Platinum - $1,555.00 – Down $21.00.
- Palladium - $586.00 – Down $17.10.