Merkel backs euro, may not back Greece

 

U.S. stock futures received a boost this morning, thanks to German Chancellor Angela Merkel.  Overnight, Merkel reaffirmed Germany’s commitment to the euro, much like what European Central Bank president Mario Draghi said recently.  “With Merkel voicing her support for Draghi’s plans and restating that all measures would be taken to defend the euro, investors are breathing a sigh of relief this morning,”” said Mike McCudden of Interactive Investor.

Speculation that a Greek exit from the eurozone is building today, as Greek Prime Minister Antonis Samaras is scheduled to meet with Merkel today and French President Francois Hollande Saturday.  Recently, there has been talk of Greece seeking to extend their austerity program over four years instead of the originally-agreed-upon two years, which may not sit well with Germany and France, who are reportedly finished compromising with Greece.  Samaras and his political party promised this extension during elections in Greece, and not being able to obtain it may cause further political issues in the country.

Gold and Silver prices have recovered from slight early morning losses on Merkel’s pledge to the euro.  Nick Tevethan of ANZ in Singapore said, “The (Gold) market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range.”  The Federal Reserve’s Jackson Hole, Wyo. meeting at the end of the month is likely to send Gold out of that range.

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

  • Gold, $1,618.90, Up $1.20.
  • Silver, $28.35, Up $0.03.
  • Platinum, $1,458.50, Up $22.30.
  • Palladium, $595.30, Up $10.30.

 

Enhanced by Zemanta

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.

 

Enhanced by Zemanta

Profit Taking Pulls Down Stocks, Precious Metals

 

U.S. stock futures and Precious Metals are down slightly this morning, as investors are taking profits on the recent gains.  News of a downgrade to the outlook for Greece’s sovereign debt rating also affected the markets, as the EU and International Monetary Fund seem less likely to provide more bailout funds to the troubled country.  Also, the Bank of England paved the way for another round of quantitative easing for its country, cutting growth and inflation forecasts.

At least one analyst believes that the recent market rally is actually just setting up the stock market to fall.  “I think we’re in choppy waters and that continues,” Charlie Morris of HSBC Global Asset Management said.  “You need to trip the market to have a proper collapse.  So you almost need to set it up with a rally, get everyone excited and then it can fall.  If there are risks, the risks to a very negative market come after this rally fades.”  In the long-term, traditionally, steep stock market losses are supportive of the Gold price.

The main topic supporting the price of Precious Metals right now is still the possibility of future monetary easing by the U.S. and the eurozone.  Richcomm Global Services senior analyst Pradeep Unni said, “Gold seems to be supported by hopes that Europe and the United States would launch more stimulus measures to help shore up their faltering economies.  Investors are betting that the festering debt crisis in the eurozone could push the ECB to launch a new round of bond-buying soon.”

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

  • Gold, $1,608.40, Down $2.40.
  • Silver, $27.90, Down $0.30.
  • Platinum, $1,403.70, Down $7.70.
  • Palladium, $586.50, Down $3.20.

 

Enhanced by Zemanta

Gold Climbs Higher

 

Gold prices have made a significant move upwards today due to uncommonly positive news from Europe. Andrey Kryuchenkov, an analyst at VTB Capital summed it up by saying, “The (European Central Bank) comments that the (European Stability Mechanism) can eventually get a banking license and a pronounced euro rebound against the U.S. dollar drove gold prices to 2-1/2 week highs.”

The good news out of Europe today could be short lived. Reports from Spain and Greece are far from positive. In Spain the debt is getting to the point of needing a full bailout. In Greece, the problem is paying on the bailout they have already received. Greece’s Prime Minister Antonis Samaras was quoted as saying, “There are certainly delays in this year’s agreed program, and we must quickly catch up.” Another official speaking on condition of anonymity was much blunter, as the official said, “The debt-sustainability analysis will be pretty terrible.”

The issues in Europe have not gone unnoticed by the United States Treasury Secretary Tim Geithner. It has been seen that when a large global economic power such as Europe struggles, the effects are seen worldwide. “The economic recession in Europe is hurting economic growth around the world and the ongoing financial stress is causing a general tightening of financial conditions, exacerbating the global slowdown,” Geithner said in testimony before the House Financial Services Committee.

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

  • Gold, $1606.90, Up $28.70.
  • Silver, $27.40, Up $0.50.
  • Platinum, $1400.50, Up $13.90.
  • Palladium, $565.50, Up $2.90.

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.

 

Enhanced by Zemanta

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.

 

Enhanced by Zemanta