Precious metals are rising again, largely on safe haven appeal, as concerns in Spain and Greece have not abated and gold imports in China are climbing. HSBC wrote, “Gold prices may be supported by China’s growing appetite for bullion, as imports from Hong Kong climbed to record highs. Furthermore, imports of gold coins, which are reported in a separate category in the trade data, increased significantly to 1,876 kg in April from 5 kg in March. The ability of China to sustain gold imports is impressive, considering that the economy is showing signs that growth is cooling and income growth is moderating.” Meanwhile Commerzbank feels that gold has “regained its safe haven status.”
At the G-7 conference, Spain’s Treasury Minister Cristobal Montoro basically sounded the alarm about how bad the banking situation is in Spain at this time. As the debt gets worse the access to credit to help bail themselves out is becoming more and more detrimental. He even called for European assistance, a departure from what other government officials had wanted, which was to raise the funds itself. Germany is pushing Spain to accept the bailout. In an interview Montoro said, “The risk premium says Spain doesn’t have the market door open. The risk premium says that as a state we have a problem in accessing markets, when we need to refinance our debt.”
Central banks remain squarely in the crosshairs as the main target to appease economic concerns. Federal Reserve Chairman Ben Bernanke is expected to testify before a congressional panel Thursday about the current economic outlook and monetary policy. Chief strategist Michael Derks said, “Policy makers would appreciate that both growth and inflation remain too low, and that financial conditions have the potential to be eased still further. As such, Bernanke and his fellow board members are probably considering a further round of [quantitative easing], coupled with an extension of their forward guidance on monetary policy.”
At 8:02 a.m. (EDT) – the APMEX Precious Metals spot prices were:
- Gold – $1,617.70 – Up $4.30.
- Silver – $28.41 – Up $0.32.
- Platinum – $1,440.80 – Up $11.50.
- Palladium – $613.50 – Down $0.40.