Morning Gold & Silver Market Report – July 6,2011
Peter LaTona
7/6/2011 7:59:00 AM
THE FOUR STRUCTURAL HEADWINDS FACING THE US ECONOMY -
In an article published on Monday, PIMCO CEO and co-CIO, Mohamed El-Erian, presented his view of the four structural headwinds facing the US economy. First is the housing market. Nearly three years after the global financial crisis, the US housing market has still not set a bottom and this undermines confidence in an economic recovery. Second, not only is the jobless rate a major concern, it too is structural. There is a 9% unemployment rate, declining labor participation and an unemployment rate of 24% among 16-19 year olds and a 40% rate for African Americans. Third is the uneven credit flow. Bank lending has not rebounded and this punishes small businesses and lower income families more than others. Fourth is our debt and leverage problem. We are coming off a “great age” of over- borrowing and over-spending, and the private sector has not recovered. The public balance sheets have not recovered either. Municipalities, states and even the federal Government are all struggling to find ways to reduce spending and raise revenue in order to balance their books.
There are many who question if the announced bailout of Greece can prevent further contagion for the European debt crisis. Moody’s credit rating service lowered Portugal’s rating to junk yesterday, while at the same time warning that they (Portugal) may need another bailout. The cost of Portugal’s debt insurance skyrocketed to record highs on Wednesday. During a CNBC interview, Puru Saxena, CEO of Puru Saxena Wealth Management said, ”The debtor nations who are overleveraged should be allowed to go bust. What politicians are doing now is trying to solve the debt crisis by issuing more debt. Judgment day will come sooner or later and as far as I’m concerned Greece is already bankrupt and Portugal is heading that way and a lot of other countries are in the queue.”
Gold and Silver were down in overnight trading, but have bounced back up on this morning’s pre-market news.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,523.10 – Up $10.00
- Silver price - $35.61 – Up 14 cents
- Platinum price - $1,742.70 – Up 60 cents
- Palladium price - $776.30 –Down $1.40
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
