Mid-Day Gold & Silver Market Report – 12/7/2011
EUROPE FEELING THE PRESSURE
Precious metals prices were holding firm since this morning, even though the market was concerned with whether European leaders will shore up the region’s debt issues at this Friday’s planned European Union summit. The stock market and the euro are down on reports that the European Stability Mechanism possibly might take control of the European rescue fund soon. RBC Wealth Management’s Philip Dow said, “It’s difficult to get a bottom line outcome on the European situation; macro concerns are driving the market. It’s a challenging environment to manage money.”
The Greek Parliament was to vote today on that nation’s 2012 budget. The budget will include new austerity measures along with growth measures designed to control the Greek debt. Expectations are high for European leaders to reach some positive resolution at this week’s summit. The pressure is on for French President Nicolas Sarkozy and German Chancellor Angela Merkel to resolve the financial domino effect that has taken over the eurozone. French Finance Minister Francois Baroin said, “Neither Nicolas Sarkozy nor Angela Merkel will leave the negotiating table of this summit until there is a powerful deal.”
Analysts are curious about what Gold prices might do when the European Central Bank meets Thursday to announce its second policy rate decision. The new strategy may include rate cuts along with the willingness to buy more sovereign debt. Will Rhind, head of U.S. investment for ETF Securities, speculated on Gold’s reaction to the EU decisions, saying, “If you look at historical precedent here in the U.S. as well as other parts of the world where central banks have implemented this loose monetary policy, these have been Gold-positive signals.” Rhind said he believes that the euro and Gold will deviate from their usual positive correlation if more money is printed and put into circulation, which would lessen the value of the euro and sustain Gold.
At noon (CST), the APMEX precious metals spot prices were:
- Gold - $1,739.90 – Up $10.10.
- Silver - $32.68 – Down $0.05.
- Platinum - $1,523.70 – Down $1.30.
- Palladium - $687.00 – Up $15.80.