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

Timothy Oakes

6/6/2012 4:06:00 PM

AMERICAN STOCKS SURGE; GOLD PRICE ALSO HIGHER  

Precious Metals prices have seen a relatively volatile day but remained in positive territory throughout the day. Many traders are speculating that poor jobs data, renewed optimism that stimulus will be re-introduced, and growing safe haven sentiment are boosting Precious Metals. Chief market strategist Jeff Kleintop said, “While stocks may be nearing an attractive entry point, Precious Metals may be rising on investors’ shopping lists as they start to look at deploying cash positions.” Silver rallied as well today, rising 4 percent for the day, the largest rise since February.

There is a lot of cautious optimism bubbling ahead of Federal Reserve Chairman Ben Bernanke’s testimony before Congress tomorrow. The economic stimulus is not limited to domestic markets, but there is a belief that world central banks will start introducing their own national stimulus, sending global and domestic markets climbing. Global strategist Dan Greenhaus said, “There’s just been, for the last 48, 72 hours, a growing feeling that a 10 percent decline in the stock market is as deep a decline as you would get with Ben Bernanke lurking tomorrow.” He also added, “The fate of the market in the next couple of days is in Ben Bernanke’s hands, and its over his interpretation of the state of the economy.”

There is a growing sense that the European Central Bank will step in, but not to the level some economists are expecting. The ECB has stepped in with three month loans, but has not announced plans for additional three year loans. Rate cuts and additional liquidity support for banks are being asked for, as well. However, without the three year loans, the pressure is on sovereign governments to help themselves. ECB President Mario Draghi said, “I don’t think it would be right for the ECB to fill other institutions’ lack of action.” However some economists are alluding to a lengthier resolution, including economist Tobias Blattner, who said, “Draghi left the door wide open for a rate cut. … But policy makers wanted to keep their powder dry until after the Greek elections and the independent assessment of the Spanish banking sector.”

At 5:02 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,619.50, Up $3.10.
• Silver, $29.46, Up $0.96.
• Platinum, $1,465.30, Up $22.80.
• Palladium, $626.80, Up $7.00.

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