Morning Gold & Silver Market Report – 7/5/2011

Peter LaTona

7/5/2011 7:45:00 AM

GOLD JUMPS BACK OVER $1500 IN OVERNIGHT TRADING – Silver, platinum and palladium are up sharply as well. This comes as the world equity markets are posed for yet another gain. There is a mixed message in the marketplace, as some investors see growth and are jumping into equities, while others see risk and are jumping into safe haven investments such as gold.

The European Central Bank (ECB) will continue to accept Greek debt as collateral for loans, unless all the major credit agencies declare Greece to be in default. The key phrase is “all the major credit agencies”. Standard & Poor’s has already stated that they will, so the question is will others follow. Fitch, the third largest rating agency is expected to call this roll over plan a default. As of yet, there is no indication from Moody’s. The second bailout has already been delayed as countries debate on how to involve private Greek debt holders. The ECB has indicated they are not concerned because in their opinion it will not trigger a major credit event.

Could it be that we are not too far off from a debt deal? Despite all the political posturing, from a dollar standpoint the two sides are not too far off. Only last weekend, negotiators felt they were close to $2 trillion – plus deal. Then the rhetoric ramped up as the President compared the Democrats to lazy schoolchildren, while the Republicans accused the Democrats of being addicted to spending. Most analysts still feel that a deal will get done, but certainty diminishes as the deadline grows near.

At 8AM (CT) the APMEX precious metal prices were:

• Gold price - $1,509.80 – Up $26.20
• Silver price - $35.12 – Up $1.35
• Platinum price - $1,733.00 – Up $16.20
• Palladium price - $771.30 – Up $11.80