Questions about currency, Greece asks for more time

The chairman of Rogers Holding, Jim Rogers had some very direct statements regarding his investment outlook in a recent interview. On the topic of global currencies and their future, the chairman was quoted as saying, “paper money is becoming more suspect”. When asked about gold he said that it “has been used for thousands of years and he’s not one to question history.”  He also added that the “cracks” have started show in global currencies and “maybe within ten years we won’t use paper money.”

Talks have begun between European Union leaders today regarding the economic crisis that is ongoing in the region. One of the main topics is going to be the country of Greece and their ability to pay back the loans they have taken from the EU. Greek Prime Minister Antonis Samaras is making his case to get an extension on deadlines to pay back the funds.  “All we want is a bit of ‘air to breathe’ to get the economy running and to increase state income. More time does not automatically mean more money,” Samaras said. The main issue revolves around the Greek government agreeing on an exact plan to raise the funds needed. If the debt continues to go unpaid there could be more talk of Greece exiting the union.

In the United States, there is a small town in Wyoming that has the attention of the economic world. In Jackson Hole, Wyo., the Federal Reserve is holding its annual meeting of many of the top central bankers from around the world. In the past, these meetings have given way to market-shaping events such as monetary easing. As for this year’s meeting, most experts aren’t expecting much, if anything. After the meetings the Fed’s Chairman, Ben Bernanke will speak publicly to give his notes on the event.  “I don’t think he’s going to say anything new,” added Catherine Mann, a finance professor at Brandeis University.

At 1:00 pm (EDT), the APMEX precious metals spot prices were:

  • Gold, $1640.00, Down $1.40.
  • Silver, $29.58, Up $0.04.
  • Platinum, $1526.60, Up $17.80.
  • Palladium, $630.40, Up $4.70.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 7 p.m. (CDT)! Or call us Fridays until 5 p.m. (CDT)! 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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John Paulson has more than 44 percent of his equities now in gold

 

John Paulson has more than 44 percent of his equities now in gold. At this time last year Mr. Paulson had 25 percent in the yellow metal. That’s an increase of 19 percent of his 21 billion dollar hedge fund towards gold. The last time he was this invested in the metal was March 2009, when he had about 46 percent invested. Gold prices went lower in the second quarter, the largest loss since September 2008.

Today’s movement in the gold market has shown the affect another round of monetary easing could have on pricing. Just because there have been signs of an economic slowdown in the U.S.A., some economist think it is not a foregone conclusion that the Fed will act. “While further monetary easing remains a viable option for the Fed, the timing may be delayed for more dire conditions,” said Michael Woolfolk, a senior currency strategist at BNY Mellon in New York. In the second week of next month there will be a meeting of the Federal Reserve that could help outline the direction they will be taking.

In the last few months there has been talk of Greece making an exit from the European Union. The leaders of the union promised to do everything in their power to keep it together. The intention may be good, but the reality could be Greece leaving sooner than later. “It’s a question of when, not if. Next month there is the ratification of the ESM [European Stability Mechanism] in Germany and you may well see a situation where Greece leaves the euro, the ESM is ratified and Spain and Italy then go in and ask for the money. There is a feeling that time is running out,” Paul Day, Chief Strategist, at Market Securities said in an interview.

At 1:07 pm (EDT), the APMEX precious metals spot prices were:

  • Gold, $1604.00, Up $3.10.
  • Silver, $27.86, Down $0.01.
  • Platinum, $1397.10, Down $3.00.
  • Palladium, $579.40, Down $0.60.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 7 p.m. (CDT)! Or call us Fridays until 5 p.m. (CDT)! 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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Morning Gold & Silver Market Report – 8/10/2012

FALLING IMPORT PRICES COULD LEAD TO MORE QE

Import prices in the U.S. fell unexpectedly in July, extending the streak to four months of declines.  The decline in import prices could be one more reason for the Federal Reserve to ease monetary policy further.  Historically, tools such as quantitative easing have been very supportive of Precious Metals prices.

The possibility of further easing is one of the reasons gold investors are the most bullish in five weeks, according to Bloomberg.  Among the factors supportive of the Gold price are disappointing economic figures out of China and Europe.  Colin O’Shea of Hermes Investment Management Ltd said, “More quantitative easing will certainly be beneficial to commodities (like Gold).  Do you need more QE to drive the market higher?  Probably not.  The demand side of the equation has been pretty robust.”

The strongest economy in the eurozone, belonging to Germany, is inching closer to a recession.  Joerg Kraemer, chief economist at Commerzbank, said, “The German economy is losing momentum – there’s no doubt about that – and in the third quarter the economy will shrink compared to the second quarter.  Things will go downhill from here.  The German economy is not faring as badly as the rest of the eurozone, but it can’t disconnect itself, especially as growth in China has slowed and continues to do so.”

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

  • Gold, $1,616.90, Down $1.80.
  • Silver, $27.85, Down $0.36.
  • Platinum, $1,402.30, Down $11.50.
  • Palladium, $581.00, Down $7.30.

Gold waits on Central Bank meetings

 

The Gold price has started the week in a holding pattern. After last week’s significant climb of more than 2 percent, the yellow metal is waiting for a signal from the central banks in Europe and the United States this week to determine a course of action. Most expect European Central Bank President Mario Draghi to deliver on a promise he made last week of doing “whatever it takes” to save the euro. If he doesn’t, some believe it could have serious repercussions. “The market will be very disappointed if Draghi doesn’t deliver,” Commerzbank analyst Daniel Briesemann said. “The expectations for the upcoming ECB meeting are very high, and he must say something really significant. If he fails to do so, we will probably see lower commodity prices across the board, due to a stronger U.S. dollar.”

In the United States, the theme of the Federal Reserve discussions continues to be a third round of quantitative easing to help further stimulate the economy. In Europe, there is now talk of a round of easing for that region. The European Central Bank is to announce a decision Thursday regarding its future plan of action. While it is not believed there will be any drastic measures such as monetary easing happening this week, it is expected some action will be taken. That may come in the form of restarting the controversial bond purchasing program or more action on interest rates. Not all members of the European Union agree with such measures. The president of one of Germany’s largest banks is one of them. “The mechanism of bond purchases is problematic because it sets the wrong incentives,” a spokesman for Bundesbank President Jens Weidmann told Reuters.

As the Precious Metals markets await cues from the central banks, so does the stock market. “You won’t get movement either way; the market just has to catch up with itself,” said Ken Polcari, managing director at ICAP Equities in New York. “That being the case, certainly everyone thinks that Europe is going to come out with this big bazooka, and they also think the Fed will launch, so therefore the market is going to stay up here.”

At 1:03 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,619.70, Down $0.60.
  • Silver, $28.10, Up $0.51.
  • Platinum, $1,411.60, Up $3.10.
  • Palladium, $589.40, Up $16.50.

 

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Euro tanks as Spain. Greece issues resurface

 

Renewed worries of a deepening eurozone debt crisis have sent the euro to a two-year low against the American dollar, and Precious Metals are following the former downwards.  Jeremy Stretch of CIBC said, “What began as a Spanish banking bailout looks to be moving rather quickly towards a possible sovereign bailout.  Overlay that with increasingly negative news on Greece and you get a fairly negative mix, so the path of least resistance for the euro is down.”  Spanish bond yields rose to the highest levels in the history of the euro.

The bad news out of Greece comes from reports that the International Monetary Fund (IMF) will no longer provide additional financing for the country.  Greece could be broke by September if it does not receive additional aid from the IMF.  The problem is Greece not being able to (or simply refusing to) meet goals set by the Troika in order to receive aid.  German Finance Minister Wolfgang Schaeuble said, “If there were delays, Greece must make up for them.”

“Dr. Doom” Nouriel Roubini believes that the U.S.A. economy is still on a downward slope.  After saying that rosy forecasts by economists are out of line, Roubini said, “In 2013 … as some tax cuts are allowed to expire, disposable income growth and consumption growth will slow.  The U.S. will then face not only the direct effects of a fiscal drag, but also its indirect effect on private spending.”

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

  • Gold, $1,569.30, Down $15.20.
  • Silver, $26.86, Down $0.53.
  • Platinum, $1,392.90, Down $21.60.
  • Palladium, $565.40, Down $11.70.

 

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