Euro region unusually divided before summit


Precious Metals are trading lower this morning, thanks to investors moving to the sidelines ahead of the European Union summit, which starts tomorrow.  Michael Turner of RBC Capital Markets said, “This could be a reasonably long holding pattern until the headlines start to flow from the European Council’s heads of state summit tomorrow.”  The wait-and-see approach has currencies like the U.S.A. dollar and the euro trading mostly flat.

While summer is likely to not hold any big moves by policymakers in the U.S.A., Europe, or China, Deutsche Bank analyst Daniel Brebner believes one thing could support gold.  “…I think we’ll continue to see very steady buying by central banks, which have been in the market for the last couple of quarters or so.  That should help gold prices from weakening…” he said.

European leaders aren’t exactly agreeable ahead of the summit.  German Chancellor Angela Merkel, in response to euro bonds being a potential solution to the debt crisis, said that she doesn’t expect that to happen in her lifetime.  With borrowing costs in Italy and Spain reaching dangerous levels, the leaders of those countries are calling for assistance, and Merkel wasn’t keen on that idea either.  Spanish Prime Minister Mariano Rajoy said, “The most urgent issue is the one of financing.  We can’t keep funding ourselves for a long time at the prices we’re currently funding ourselves.”

At 9 a.m. (EDT), the APMEX precious metals spot prices were:

  • Gold – $1,567.30 – Down $9.10.
  • Silver – $26.80 – Down $0.36.
  • Platinum – $1,409.70 – Down $19.20.
  • Palladium – $580.10 – Down $14.60.
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