Greece and the fiscal cliff

U.S. stock futures look to start lower today. Negotiations will continue today between the President Obama and top congressional leaders as they try to come to terms on upcoming tax increases and spending cuts, otherwise know as the Fiscal Cliff. Greece is still in the news as the euro-area finance ministers are in discussion over the next round of aid for the country’s distressed economy. Henrik Drusebjerg, senior strategist at Nordea Bank said, “We could see U.S. markets start positively, but they’re a bit nervous about Greece.”

Today, if you weren’t already aware, is Cyber Monday, a term that was coined back in 2005. Economically, it is a boost to the retail sector as was Black Friday and Small Business Saturday. It’s estimated that today’s Cyber Monday will be the biggest online shopping day of the year for the third year in a row, up 20 percent from last year.

The Gold price stayed near its five week high in overnight trading even after the dollar strengthened. Edel Tully, an analyst at UBS AG in London said, “The uncertainties surrounding the euro group meeting on Greece have impacted the euro-dollar and in turn Gold.”

At 9 a.m. (EST), the APMEX Precious Metals spot prices were:

  • Gold, $1,753.40, Up $0.00.
  • Silver, $34.21, Up $0.03.
  • Platinum, $1,616.80, Down $1.30.
  • Palladium, $670.00, Up $1.40.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EST)! Or call us Fridays until 6 p.m. (EST)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

 

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Gold moves with the dollar. Unrest in Syria persists

 

While a strong U.S. dollar continues to put pressure on gold prices, many investors are showing confidence in gold after it fared well during yesterday’s sell off. “Gold is just moving with the U.S. dollar,” MKS Finance head of trading Afshin Nabavi said. “Yesterday, below the $1,570 level, we saw some light physical related interest come in. Today it has been very quiet.” The euro/dollar exchange rate has been a primary driver in day to day movement in gold.

Global unrest adds to the cloud of global economic uncertainty. The Syrian conflict continues to be a source of concern as rebel troops and forces of embattled President Bashar al-Assad continue to clash. US concerns were increased as Damascus has admitted it has, and is willing to use chemical and biological arms in the event of what it calls foreign intervention. U.S. President Barack Obama said the world would hold Assad and his entourage accountable “should they make the tragic mistake of using those (chemical) weapons

At 1:00 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,576.40, Down $2.50.
  • Silver, $26.85, Down $0.28.
  • Platinum, $1,386.80, Down $12.10.
  • Palladium, $562.90, Down $9.10.

APMEX’s Account Managers now have extended hours and are here to serve you until 7 p.m. (CDT) Mondays through Thursdays! If you have any questions about investing in precious metals or would simply prefer to place your order by telephone, we are here to help

 

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APMEX End of Week Report 6/29/2012

Silver Undervalued and Golden Haven:

Precious Metals closed out the week on a positive note rebounding from losses Thursday.  Precious Metals prices have been following the global economic situation and the movement of the American dollar.  The dollar weakened against the euro on news of a European plan to lower eurozone member nations’ borrowing costs.  Economist Vishnu Varathan said, “It still falls short of a concrete solution, but the removal of severe pessimism over what’s going to come out of the EU summit is driving markets higher.” Meanwhile, the news has led analyst Lynette Tan to offer a positive year end outlook for Gold. She said, “In the long run, we’re still bullish on Gold. It’s still likely to hit last year’s high of $1,920. The global economy is not doing well, and we expect safe haven demand to be back for Gold.”  There is speculation that Silver is undervalued at current levels and about what actually is driving the price. Julian Phillips at silverforecaster.com said, “With the monetary stresses now and for the next few years at current levels, there is little reason why prices should fall. Gold will react more and more as a monetary metal and the Silver prices will move with it, not with economic conditions.”

European House in order?:

Eurozone leaders came together this week and hammered out a surprising compromise plan to help member nations. There are still issues to be worked out, but going from “no hope” to at least a road map of a plan on which everyone agrees was a boost to global markets. The biggest shock of all is Germany’s agreement to a majority of the provisions. Banker Holger Schmieding said, “The summit result offers no ‘silver bullet’ to solve the euro crisis once and for all. … It is another attempt to buy some extra time for the underlying fiscal repair and structural reforms to show results.  All in all, there is some progress.” However, strategist Charles Diebel stated what many investors are probably thinking: “It is one step on a very long road.  But we don’t have any details, and arguably the detail is where the risk lies, because the market will start to pick holes in it, as we’ve seen previously.”  Crude oil and Gold prices began to climb after European Union leaders announced a strategy to have a single financial director for the region. The European Central Bank will step into this supervisory role for banks in the eurozone. This approach should help calm the markets. In some bearish news affecting crude oil, Saudi Arabia is planning to resume an oil pipeline project that has been on hold for a reported two decades, which should relieve some concerns involving the Strait of Hormuz.

Health Care & Jobs:

The “individual mandate” portion of President Barack Obama’s health care reform act has been upheld as constitutional in Thursday’s 5 to 4 Supreme Court ruling. This ruling comes just months before the presidential election, and Republicans are vowing to push for a repeal of the bill. While the long term effect of this ruling is not clear, it will be interesting to see how this affects the broader economy going forward.  This past week showed little improvement in the American labor market, as applications for unemployment benefits approached a high for the year. Concerns over the eurozone debt crisis and the potential end of the Bush era tax cuts have many employers running lean in terms of their headcounts. “There is no progress,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “There is clearly an underlying weakness that is troubling. The labor market is sputtering along, struggling to create jobs. The pace of consumer spending will slow in the second quarter.”  United States consumer sentiment for June fell to its lowest level since December. Americans’ attitude toward the economy isn’t necessarily optimistic now, especially from the viewpoint of those in households with incomes of more than $75,000. Richard Curtin, a survey director, said, “Since these households account for a large share of total spending, if the declines continue in the months ahead, it could have a substantial impact on total spending.”

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Gold prices ease on caution ahead of Fed statement

American stock futures are trading slightly higher this morning, while the Gold price has dropped.  This movement comes ahead of a highly-anticipated Federal Reserve policy decision which could bring about a new round of quantitative easing.  Nick Beecroft of Saxo Capital Markets U.K. explained that while QE is the hope of the markets, the Fed is more likely to announce an extension of Operation Twist, its bond-buying program.  “This will probably disappoint equity markets, which seem to be expecting ‘another shot of heroin,’” he said.

European leaders fleshed out a list of concrete steps to potentially solve its debt crisis in front of a Group of 20 (G20) summit, with the G20 leaders supporting what the eurozone brought to the table.  U.S.A. President Barack Obama said that it was clear that the leaders know what steps need to be taken to shore up the debt crisis, adding, “None of them are going to be a silver bullet that solves this thing entirely … in the next week or two weeks or two months, but each step points to the fact that Europe is moving towards further integration rather than break-up.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold – $1,605.60 – Down $18.10.
  • Silver – $28.20 – Down $0.27.
  • Platinum – $1,459.90 – Down $22.60.
  • Palladium – $624.90 – Down $5.50.

Gold Ends Higher for the First Day in Five

After closing lower for four consecutive trading days, gold prices rebounded today after hitting a 10-month low.

Oil prices continued to decline today, providing some welcome relief to American consumers. “We had soft economic data and European concerns weighing on equities and oil is being pulled along lower,” said Jason Schenker, president of Prestige Economics LLC. “Elevated concerns about the European story and disappointing U.S. economic data have been the story for two weeks now.”

Moody’s is set to announce downgrades of several Spanish banks this evening. According to a source with knowledge of the issue, the key reasons for the downgrades are rising loan defaults, a renewed recession, restricted funding access and the reduced ability of the government to support lenders. The Spanish newspaper El Mundo reported yesterday that customers of the Spanish bank Bankia SA had withdrawn more than 1 billion euros from the bank since the government announced it was taking over the bank on May 9. Bankia SA and the Spanish government denied that a bank run was underway, but markets hammered Bankia’s share price nonetheless.

Ahead of tomorrow’s G8 summit at Camp David, Barack Obama is urging European powers to ease austerity policies and adopt a growth strategy. The newly elected president of France, François Hollande, is expected to support Obama’s argument. Hollande defeated incumbent Nicolas Sarkozy by campaigning against austerity measures, which are deeply unpopular in some European countries.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold – $1,575.20 – Up $37.10.
  • Silver – $28.08 – Up $0.80.
  • Platinum – $1,454.00 – Up $19.80.
  • Palladium – $604.00 – $7.90.
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Weekly Gold and Silver Market Recap for March 9, 2012

Resolution of Greece’s latest debt problems and stronger-than-expected US employment data help Gold prices

by Craig C. Calvin. Email Craig.

Last week, the Gold price fell sharply in response to testimony by Federal Reserve Chairman Ben Bernanke before Congress that indicated seemed to quell chances of another round of quantitative easing from the Fed. However, a Wall Street Journal report this week indicated that the Fed was looking at an alternative bond-buying program, and investors responded by turning to the safe haven of Gold out of inflation fears. Easing in the past has been associated with increased inflation here in the U.S. as the buying power of the dollar drops. Gold and other precious metals historically have had a negative correlation with the value of the dollar. This week, legendary money manager Marc Faber, affectionately known as “Dr. Doom,” advised investors to buy precious metals. Faber told Reuters, “Political risk was high six months ago, and it is higher now. I think sooner or later, the U.S. or Israel will strike Iran.” He continued, “Say war breaks out in the Middle East or anywhere else; Mr. Bernanke will just print even more money — they have no option. … They haven’t got the money to finance a war.”

This was a very important week for Greece, as private bondholders had to decide to what extent they would participate in the Greek bond swap initiative designed to cut an estimated 100 billion euros from Greece’s debt and avoid a disorderly and potentially contagious default. Some hedge funds considered refusing to join the swap, and even threatened to take legal action if Greek policymakers didn’t offer them a better deal. By Friday, however, the bond swap was a done deal. More than 83 percent of the bondholders agreed to the swap, and now Greece is in a position to force the remaining bondholders to accept the deal. This is the largest debt restructure in history, and although there is great uncertainty surrounding the Greek crisis, there will not be a default for the time being. Continue reading