Closing Gold & Silver Market Report – 12/6/2011
NEW EU “BAZOOKA” IN THE WORKS?
The Gold price stabilized throughout afternoon trading, approaching even trading for the day after volatility in the currencies market and technical selling. World markets seem to be taking a breath before the upcoming European Union financial meeting set to begin Friday. The prognosis for Gold looks appealing in this financial crisis. Analyst Michael Block, of Phoenix Partners Group, said, “It is going to be a go-to asset once everyone digests that if Europe is to be saved, the ECB (European Central Bank) will have to directly or indirectly print money, and the inflation trade will be all on once again. … I would be buying Gold opportunistically.”
U.S. Treasury Secretary Timothy Geithner spoke with German Finance Minister Wolfgang Schaeuble and supports the German-French initiatives that urge closer European financial cooperation. He also urged policymakers to look to central banks to help provide protection from the growing debt crisis. This is a departure from U.S. policy over the past few months, in which the U.S. pushed for more action from European leadership. In an interview, Geithner said, “Financial crises are ultimately resolved when governments and central banks succeed in creating conditions that make it compelling for investors to take the risk involved in lending to governments and to banks.”
During this week’s meetings, a separate rescue fund from the European Financial Stability Facility was reported to be in the works. This is just an idea that will be presented in conjunction with rewritten treaties and other financial proposals. Apart from the EFSF, this proposal would be called the European Stability Mechanism, with primary hopes of boosting creditworthiness, which has come into question in the past few days. This is a controversial measure and likely will be the subject of much debate.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,730.50 – Down $2.00.
- Silver - $32.82 – Up $0.46.
- Platinum - $1,527.20 – Down $6.30.
- Palladium - $671.50 – Up $25.00.