Weekly Gold and Silver Market Recap for June 1, 2012

by Robert Davis. Email Robert.

U.S. Economic Data Disappoints

In a May survey, consumer confidence is at a five month low.  Only 13.6 percent of consumers say business conditions are good.  Pending home sales dropped in April, which was unexpected.  To top this off, only 69,000 new jobs were created in May, which pushed the unemployment rate to 8.2 percent.  “For those lucky enough to have a job, their spending power is sliding when accounting for inflation.  The markets will respond negatively to this report,” Todd Schoenberger at the BlackBay Group in New York said.  Stock prices slid in response this report, while Precious Metals were benefiting.  “The housing market will be affected by the weaker than expected jobs report,” said Doug Duncan, chief economist at Fannie Mae.  “The drop in pending home sales is clearly disappointing,” said Pierre Ellis, an economist at Decision Economics in New York.  “It remains to be seen whether this is the beginning of a real downturn.”

U.S. Treasury Yields Drop to Lowest Rates in History

Interest rates on 10 year Treasury bonds hit their lowest point ever this week as more investors fled risky assets, also driving stocks to continue their recent slump.  Interest rates on bonds fall when there is greater demand in the market, and this demand is typically driven by fear of risk. “If you look at the global marketplace, we are the supermarket of safety,” said William Larkin, a fixed income money manager for Cabot Money Management Inc.  “We’re talking about an elevated level of fear. This is mainly driven by growing uncertainty in Europe.  People are saying, ‘I can buy the Treasury and I know my money will be returned to me.’ ”

…And of Course, Europe Still Looks Terrible

Spain was hit with another credit downgrade.  As a result, borrowing costs in that country soared.  It now seems a matter of when, not if, a bailout will be necessary.  Reports also showed that the European Central Bank rejected Spain’s plans to recapitalize Bankia SA, its largest bank, which the Spanish government partially nationalized in response to the bank’s near collapse.  One headline was particularly interesting, with an analyst suggesting that Spain could exit the eurozone before Greece.  For Spain, the eurozone’s third largest economy, leaving the euro may not be that country’s choice but instead may be the European Union’s.  “They are too big to rescue, they have no political hang ups about rupturing their relations with the EU, they are already fed up with austerity, and there is a bigger Spanish-speaking world for them to grow into,” said Matthew Lynn of Strategy Economics.

2012 Silver Australian Kookaburra Dragon Privy

In 1990, the Perth Mint of Australia began minting an unusual Silver bullion coin: the Silver Kookaburra. These beautiful coins celebrate the very interesting bird native to Australia. And now a special issue has been minted featuring a dragon privy mark to honor 2012 as the Year of the Dragon!

Each 1 oz Australian Silver Kookaburra with Dragon Privy contains .999 fine Silver. The obverse features a portrait of Her Majesty Queen Elizabeth II and lists the face value of the coin, which originally was $5, but was lowered to $1 in 1992. The reverse of each coin displays the kookaburra, and this issue features a beautiful dragon to celebrate the Year of the Dragon in the Chinese lunar calendar. In addition to the privy, these Silver coins have a limited mintage of just 80,000, which makes them even more collectible!

People born in the Year of the Dragon are said to be healthy, energetic, excitable, short-tempered and stubborn. They are also honest, sensitive, brave, and inspire confidence and trust. Dragon people are the most eccentric of any in the Eastern zodiac. These Silver coins would make a great gift for the dragon person in your life, someone born in 1940, 1952, 1964, 1976, 1988, 2000 or 2012.

These beautiful, .999 fine Silver coins make a great personal collectible or a perfect gift. APMEX offers several options for purchasing: single coins, rolls of 20 coins or boxes of 500 coins, with each coin in a plastic capsule no matter the quantity. The Year of the Dragon only comes around once every 12 years, so these special coins will not be seen again for a long time. Get your unique 2012 Silver Australian Kookaburra Dragon Privy coins while you can!

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