At the opening of today’s market the outlook for gold was looking up. The Euro showed signs of improvement, gaining ground on the U.S.A. dollar. The improvement was short lived. The value of the Euro hit its lowest mark in almost two years after Spain’s credit rating was downgraded. “That trade which is directly tied to the euro weakness, and has made gold so significantly volatile, is going to have a short-term negative impact on gold, people are trading out of gold based on the euro weakness, but they will buy back into gold,” according to Jeffrey Sica, chief investment officer of SICA Wealth Management LLC.
The financial situation in Greece has been well documented. The rest of the European Union has been making contingency plans if Greece is no more. Upon first look the plans seems solid, however once the details emerge there are unresolved issues. If Greece is removed the effects will be felt thought Europe and could put other countries in financial jeopardy. Berenberg Bank economist Holger Schmieding said, “Policymakers need to make sure that the potential Greek precedent of a forced conversion of domestic euro deposits into a weak new currency would not spark a run on banks … elsewhere.”
For the U.S.A. the economic outlook seems better than it has in quite a while. Jobs are growing, the housing market is up, and the U.S.A. dollar value is going up. With all these positive news consumers still aren’t buying it. In a May survey consumer confidence is at a five month low. Only 13.6% of consumers say the business conditions are good. These reports can be a major driver in business; more than two thirds of the countries spending are based off of consumer confidence.
At 5:00 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold – $1556.30 – Down $14.40
- Silver – $27.92- Down $0.56
- Platinum – $1433.20 Up $4.70
- Palladium – $606.50 Up $14.70