Closing Gold & Silver Market Report – 5/16/2011
Stephanie Chandler
5/16/2011 4:12:00 PM
THE ARREST HEARD ‘ROUND THE WORLD The arrest of Strauss-Kahn, the International Monetary Fund chief, has been top news today and has had people laying in wait to see how stocks, commodities and currencies will be affected by this event. Why has this one man’s arrest sent the world spinning into worry mode? Greg Anderson, a currency strategist at Citigroup, weighs in, saying, “The IMF has ongoing programs with euro zone countries so if he gets replaced by a non-European, it’s an open question if they will continue to see the same level of support… that’s why the market sold off this morning.”
On the other hand, Dan Greenhaus, chief economic strategist at Miller Tabak, says that, “We do not expect the arrest to meaningfully alter the path of talks nor does it change the underlying debt math which has long suggested a Greek (at a minimum) restructuring was the most likely outcome.” It also seems that a statement from another European official, German Chancellor Angela Merkel, also helped support the euro, as she said she believes it to be too early to discuss a successor. Greg Salvaggio, a senior vice president for Tempus Consulting, notes the statement from Dan Greenhaus to say, “The little bit of support she threw behind him helped the euro pop up,” helping ease pressure on the euro.
Despite gold’s small sell-off today, the metal still performed better than all three major stock indices (DJIA, S&P 500, and the NASDAQ). The US dollar index (a measurement of the value of the dollar against a basket of six foreign currencies) fell by almost the same amount as gold rose, demonstrating some reasons many analysts point to gold as a safe-haven, insurance policy-like investment. Despite the recent decline in commodity prices overall, demand for physical gold remains strong. Michael Haynes, APMEX CEO, told Bloomberg News, “We don’t know if the euro is going to crack or stay and the dollar is facing challenges as the world’s reserve currency.”
At 4 PM (CT) the APMEX precious metal prices were:
- Gold price - $1,491.00 (up $4.10)
- Silver price - $33.68(down $1.42)
- Platinum price - $1,759.70 (down $10.60)
- Palladium price - $717.00 (up $6.50)
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies
