Closing Gold & Silver Market Report – 11/9/2011

Craig C. Calvin

11/9/2011 4:19:00 PM

U.S. STOCKS DROP AS ITALIAN BOND YIELDS REACH ‘UNSUSTAINABLE’ LEVELS

Precious metals prices have continued to drop since the Midday Gold & Silver Market Report. Gold futures saw a loss today, the first in three sessions, driven down by anxiety over Italy’s debt outlook. Silver, platinum, and palladium also ended the day with losses.

Stocks in the U.S. dropped today, weighed down by concerns over Italian bond yields and the deepening debt crisis in Europe. The Dow plummeted nearly 400 points, all 10 of the sectors in the S&P 500 fell, and the NASDAQ dropped nearly 106 points. Chaos has plagued U.S. markets as European debt markets have grown more volatile. Explaining the situation, Craig Hodges of Hodges Capital Management said, “The market has turned into a derivative of what's happening in Europe.”

With Italian government bond yields reaching levels considered to be unsustainable, the euro zone apparently has no intention of coming to Italy’s rescue. Despite the fact that Italian borrowing costs are nearing a breaking point, a euro zone official said “financial assistance is not in the cards” and indicated that there have been no thoughts of offering that country “a precautionary credit line.” Yields of 10-year Italian bonds lurched above 7% today as investors grow more doubtful about getting their money back on such bonds. Although Portugal and Italy have been able to get emergency loans from the European Union and the International Monetary Fund when borrowing costs for those countries reached similar levels in the past, the size of a potential bailout for Italy -- 326 billion euros -- is considered to be too large to be covered by the European Financial Stability Facility, the euro zone’s bailout fund.

At 4:08 p.m. (CST), the APMEX precious metals spot prices were:

· Gold - $1,771.90 - Down $29.30.

· Silver - $34.13 - Down $1.06.

· Platinum - $1,632.50 - Down $40.60.

· Palladium - $648.00 - Down $31.30.