11.4.11 Weekly Recap


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Extreme volatility has continued to plague the stock and commodity markets this week as mixed news caused wild swings;  however, Gold prices are still near six-week highs. From uncertainty surrounding Greece to Italy’s sovereign debt concerns, bad reports about Europe dominated the news headlines. In the U.S., the unemployment picture improved. The Fed has some hope for the economy despite the collapse of a large investment firm due to its Euro zone investments losses.

MF Global, a multibillion-dollar commodities and derivatives trader, filed for Chapter 11 bankruptcy protection today due to losses created from Greek bonds. MF’s trading partners have already distanced themselves from the ailing company. The Federal Reserve suspended the firm’s status as a primary dealer today. CME Group also suspended MF’s trading privileges. Jack Scoville, vice president at Price Futures Group said, “It’s a real mess, and it’s all hands on deck. MF is in the top five in clearing for commodities, so it’s not an insignificant thing.”

Greek Prime Minister George Papandreou shocked the euro zone on Tuesday when he called for a referendum on the bailout plan agreed upon last week. The Greek people have not approved of the established austerity measures. Economists at Barclays Capital wrote, “The latest brinkmanship creates new uncertainty in the eyes of markets which could be concerned that should the outcome of the referendum be negative, then either Greece would have to restructure its debt much more aggressively than the 50% currently envisaged … or it could even pave the way for an eventual exit from the euro area.” Markets fell sharply following this announcement. Papandreou withdrew his plan for the referendum vote later in the week but not before the Dow Jones Industrial Average had swung into triple-digits due to this uncertainty.

When the attention of the financial markets diverts from Greece, Commerzbank Chief Financial Officer Eric Strutz says that Italy shall be next. He said, “The whole stability of Europe depends on whether Italy gets its act together.” Italy was forced to accept International Monetary Fund oversight of implementation of austerity measures at the Group of 20 meeting this week. Italy is second only to Greece on the list of highest debt-to-gross domestic product ratio.

The Federal Open Market Committee meeting implied that the Fed is cautious but holding steady on further easing for now. Perhaps the Fed’s optimism was shored up by the promising jobs report that showed a gain of 110,000 jobs in October. This beat economists’ projections of 101,000 jobs gained. September’s results were also revised to show an even larger increase in jobs. It more sluggish than some economists had hoped, but the growth appeased the Fed. The Fed decided to take a wait-and-see approach which a number of analysts had predicted earlier in the day. Prior to Chairman Ben Bernanke’s news conference, the Fed reported, “Economic growth strengthened somewhat in the third quarter. … Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. … There are significant downside risks to the economic outlook, including strains in global financial markets.”

NATO’s involvement in the Libyan revolution officially ended this week after seven months of support. This is yet another sign that the revolution is nearly complete. It has been called “one of the most successful” operations in NATO’s history, and NATO Secretary-General Anders Fogh Rasmussen met with Libya’s National Transitional Council (NTC) this week. The NTC expressed a desire for further NATO support post-war but Rasmussen stuck to the decision to end involvement.

Edel Tully, UBS strategist, explains that the recent purchases of Gold by central banks should be encouraging to investors. Tully wrote, “As Gold continues to take its cues from the euro and risk assets, consistent official purchases offers some comfort to investors, as they help provide the yellow metal with underlying support.”

WEEKLY SPOT PRICES

Gold:
Spot Gold prices opened this week at $1,725.80. The high was on Thursday, Nov. 3rd at $1,768.30, while the low for the week occurred on Tuesday, Nov. 1st at $1,681.20. Gold ended the week up $31.50 at $1,757.30. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.

Silver:
Spot Silver prices opened this week at $34.44. Silver reached a high of $35.45 on Monday, Oct. 31st, while this week’s low for Silver occurred on Tuesday, Nov. 1st, at $32.11. Silver ended the week down $0.25 at $34.19. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.

Platinum:
Spot Platinum prices opened this week at $1,610.30 and ended the week up $26.90 at $1,637.20. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.

Palladium:
Spot Palladium prices opened this week at $650.30 and ended the week up $9.30 at $659.60. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week at APMEX.

 Video: Gold and Silver Coin Jewelry

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Shop the new Jewelry section at APMEX for a wide selection of bracelets, cuff links, bezels, necklaces, money clips and key rings. The 14-karat yellow, white gold and sterling silver bezels are available in various styles and sizes to safely secure and display a variety of common collectible coins including the 1 oz. American Gold Eagle, South African Krugerrand, and Chinese Gold Panda.

Let others know that you value the beauty and value of precious metals with APMEX jewelry items.

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