Morning Gold & Silver Market Report, 6/6/2012

Ryan Schwimmer

6/6/2012 8:00:00 AM

ECB HOLDS RATES STEADY; SPANISH DEBT SOLUTION IN THE WORKS  

Precious Metals were holding on to moderate gains this morning, with the Gold price up about 1 percent and Silver up 3 percent. The European Central Bank (ECB) seems to be the major focus today, announcing this morning it would keep its key lending rate unchanged.  American stock futures gave up some gains after the news, with investors looking for action from the ECB, though the euro strengthened over the American dollar. If solutions are found in the eurozone, further increases to the euro are likely, and if recent trends are an indicator, Precious Metals could benefit from that.

Tax proceeds in Greece are drying up, and the next step may be to stop paying salaries and pensions of government employees. Even worse, imports of food, fuel, and medicine could be next to go. Tax evaders seem to be hiding, and Nikos Maitos of Greece’s financial crimes investigation unit said, “One repercussion of the crisis is that people are harder to find. And when you do find them, they don’t have money.” It may be difficult to imagine, but with things as bad as they are in Greece, it just keeps sounding worse for Spain, which boasts an economy nearly five times the size of Greece’s.

Germany seems to be giving Spain options it has not offered to other countries in need. A deal is reportedly in the works for Spain to be able to recapitalize its banks with aid from other eurozone members without being forced to impose economic reforms. It is essentially a loophole in that if Spain put in a formal aid request, the money could come without agreeing to strict austerity measures like those seen in Greece, Ireland, and Portugal.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,634.40, Up $17.90.
• Silver, $29.43, Up $0.93.
• Platinum, $1,462.90, Up $20.40.
• Palladium, $622.60, Up $3.00.

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