Mid-Day Gold & Silver Market Report – 12/6/2011
RECESSION MIGHT HIT EUROZONE SOONER THAN EXPECTED
Gold and silver prices were moving up from morning lows. Silver was in positive territory. The persistent negativity coming from Europe is the main factor pushing prices down recently. Georgette Boele, global head of FX and commodity strategy at ABN Amro, said, “We are also seeing a cutback on positioning because the year has been very volatile, and people are less and less willing to take on big positions going into the year end.” With the European Union summit expected this Friday, riskier investors may not react calmly to the decisions that might be made.
Leaders in Europe are highly motivated to reach some agreement this week, thanks to Standard & Poor’s announcement that it might downgrade the credit ratings of 15 eurozone nations. The European Financial Stability Facility also might face a downgrade of its respected credit rating if even one of the bailout fund’s six guarantors is downgraded from a rating of AAA. The six guarantors are Germany, France, the Netherlands, Finland, Austria and Luxembourg. All are highly ranked nations that are supporting the rescue fund for the eurozone. The global market is wary of any foreign investments at this time. German Finance Minister Wolfgang Schaeuble said, “The truth is that markets in the whole world right now don’t trust the euro area at all to do what we’ve promised, namely to take the necessary decisions step-by-step and to win back the confidence” of investors.
U.S. Treasury Secretary Tim Geithner is visiting Germany this week to attend the three-day eurozone summit aimed at finding a European economic resolution. This is not Geithner’s first visit; he has been to Europe several times in the past few months, reflecting high concern in the U.S. about the eurozone crisis. Edwin Truman, a former Geithner adviser in the Treasury Department, acknowledged that Europe’s financial problems have and will affect the U.S. “In the end, the Europeans hold their fate in their hands. But the problem is, their fate is our fate. There’s no doubt that their futzing around for the last two years has adversely affected the U.S. economy and the world economy. One cannot say that too strongly,” Truman said.
At noon (CST), the APMEX precious metals spot prices were:
- Gold – $1,727.00 – Down $5.50.
- Silver - $32.59 – Up $0.23.
- Platinum - $1,526.20 – Down $7.30.
- Palladium - $672.00 – Up $25.50.