Mid-Day Gold & Silver Market Report – 12/2/2011
SOUTH KOREA INCREASES GOLD HOLDINGS; BRITAIN SPEAKS ON EURO SITUATION
Precious metals prices have pulled back from morning highs amid optimism in the U.S. economy. Internationally, for the second time this year, the Bank of Korea has increased its gold holdings, helping gold to its biggest weekly gain since October. The central bank of South Korea bought 15 tons, but its Gold holdings are at only 0.7% of its total foreign reserves. Countries such as Germany and the U.S. have more than 70% in their holdings.
British Prime Minister David Cameron on Friday urged the European Central Bank to increase its support of the euro currency. Cameron met with French President Nicolas Sarkozy, and Cameron did not agree a European Union treaty change was required to reinforce the eurozone, which Britain chose not to join. Britain’s Conservative Party has increased pressure on the British leader to loosen ties with the European Union. Party members have concerns that a move toward a fiscal union might harm the interests of London’s financial center. German Chancellor Angela Merkel defended the euro, saying it is stronger than Germany’s previous currency, the deutsche mark. A summit is scheduled Dec. 9, one that is viewed as a make-or-break meeting for the eurozone.
Charles Plosser, president of the Philadelphia Federal Reserve, said, “Daily tumult from the European debt crisis is drowning out some otherwise good news in the U.S. economy. Obviously there are some big tail risks out there, events that happen and overtake the economy,” he said. “I don’t see the underlying domestic economy heading toward recession. You watch the markets day to day and week to week since July (and) sometime it seems to be almost entirely driven by ‘what was the news from Europe today.’ In fact, a lot of the good news about the U.S. economy, the domestic economy, got sort of washed away in the wild speculation about things that are going to happen in Europe.” The good news Plosser referred to is this morning’s report of an improved unemployment rate and the healthy number of jobs created in November.
At noon (CST), the APMEX precious metals spot prices were:
- Gold - $1,748.00 – Up $10.20.
- Silver - $32.67 – Down $0.08.
- Platinum - $1,550.50 – Down $7.70.
- Palladium - $645.90 – Up $15.70.