Overnight profit taking for the euro

 

International Monetary Fund's Managing Directo...

International Monetary Fund’s Managing Director Dominique Strauss-Kahn (L) talks with , European Central Bank President Jean-Claude Trichet (C) and Italy’s Governor Mario Draghi (R) prior to the start of their G-7 meeting at the Istanbul Congress Center (Photo credit: Wikipedia)

 

After a four month euro rally, Tuesday saw some profit-taking and the euro fell against the dollar. Spain’s seeming reluctance to seek a bailout isn’t sitting well with investors either. Derek Halpenny, head of FX research in London, said “If Spain steps forward (to ask for a bailout) and all of us get some clarity it would remove an element of uncertainty.” While in a television interview, Spain’s Deputy Prime Minister admitted they were still considering the conditions of a possible bailout.

 

The other side of the euro coin is that German investor confidence rose for the first time in five months. The rise is in response to the European Central Bank’s plan to buy government bonds. Holger Schmieding, chief economist at Berenberg Bank in London, said of ECB President Mario Draghi, “Draghi may have saved Germany.

 

Gold, which tracks closely to the euro, came off a recent six month high. Similar to the euro, it succumbed to overnight profit-taking. Without any new news today, it wouldn’t be surprising to see investors jump back in.

 

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

 

  • Gold, $1,764.60, Down $5.00.
  • Silver, $34.44, Up $0.06.
  • Platinum, $1,670.10, Down $3.50.
  • Palladium, $682.40, Down $6.70.

 

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! 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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ECB to buy sovereign bonds

Mario Draghi presents his credentials as candi...

Mario Draghi presents his credentials as candidate ECB president (Photo credit: European Parliament)

“The euro is irreversible” said Mario Draghi as he announced the bond buying program at the ECB press conference in Frankfurt. The program is called “MOT” or Monetary Outright Transactions. It will focus on the secondary sovereign bond market where Draghi said it was necessary to deal with “severe” distortions in the bond markets.

Ahead of the meeting, precious metals were up across the board but most notably gold is once again over the $1700 mark. The euro has gained against the dollar due to Mario Draghi’s remarks that he would do “whatever it takes” within the European Central Banks mandate to save the euro. It will take time to see if the MOT program is considered “whatever it takes” and keeps the euro’s rally going. Gold has a strong inverse correlation to the U.S. dollar and as we have seen the Euro rally we have also watched gold rally with it, in fact, gold is at a five month high.

Closer to home today’s jobless report showed jobless claims decreasing to the lowest levels in a month. Estimates are that claims decreased by 12,000. Although this isn’t a monumental leap it is a step in the right direction and right now any positive movement is welcomed.

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

  • Gold, $1,702.00, Up $9.40.
  • Silver, $32.64, Up $0.32.
  • Platinum, $1,581.00, Up $4.40.
  • Palladium, $645.00, Down $2.00.
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Gold keeps rising, Europe in the spotlight

 

English: European Central Bank ECB Eurotower i...

English: European Central Bank ECB Eurotower in Frankfurt a.M. Germany Deutsch: Europäische Zentralbank EZB Eurotower in Frankfurt a.M. (Photo credit: Wikipedia)

 

Gold and other precious metals had big gains last week due to the U.S.A. Federal Reserve meeting and the probability of another round of monetary easing. This week has started off with the same rise in prices and monetary easing continues to be the reason. However, the location is now changed to Europe and meetings of the European Central Bank (ECB). “The ECB is evidently planning to launch a new government bond intervention program, which would inject further liquidity into the market. This should also benefit commodities due to the lack of attractive alternative investments,” analysts at Commerzbank said in a note. Some speculate these actions by the ECB could be implemented as soon as this week.

 

A few weeks ago, the ECB President Mario Draghi said they will do “whatever it takes” to keep the euro as the major currency of the region. This week will be a good indication of what exactly Mr. Draghi and his associates have in mind to do.  “Draghi certainly has to present something,” said Guillaume Menuet, economist at Citi. “A document of some sort, something of substance is what markets want to see in order to justify valuations.” One of the main issues is not a plan of action, but rather a plan that all the countries involved can agree to.

 

In the United States, there were more negative economic reports released today. The August manufacturing report was shown to have the largest drop in over three years. Economists estimated the national factory activity to have a median of 50.0 and it came in at 49.6. It shows an unforeseen contraction in the sector. U.S. construction also fell off by 0.9 percent, as with the manufacturing report, expert predicted an increase as well. Both of these reports give more talk of monetary easing by the Federal Reserve.

 

At 1:00 pm (EDT), the APMEX precious metals spot prices were:
·    Gold, $1694.40, Up $8.30.
·    Silver, $32.27, Up $0.83.
·    Platinum, $1566.50, Up $28.20.
·    Palladium, $641.00, Up $11.60.

 

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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Gold, Silver flat as Jackson Hole speech looms

Jackson Hole, WY

Jackson Hole, WY (Photo credit: mf.lane)

Gold and Silver prices are mostly flat this morning ahead of the Jackson Hole Economic Symposium to be held later this week.  Though European Central Bank President Mario Draghi has bowed out of the event, all eyes are still on the Federal Reserve and whether chairman Ben Bernanke will announce another round of quantitative easing.  Scott Anderson of Bank of the West said that the Fed has been “like a diver eyeing the pool from the edge of the diving board, but can’t seem to get themselves to move.”

The “will they or won’t they” game that the Fed has been playing in regards to quantitative easing has pushed and pulled the Gold price to highs not seen since Spring.  Many investors are expecting Bernanke to announce such a plan during his speech at Jackson Hole on Friday.  However, there is another Federal Open Market Committee meeting September 12-13 that may serve as the podium for the official announcement.  Danske Bank analyst Christen Tuxen said, “We think that we will see a fairly dovish Bernanke on Friday and that he will commit, if not at Jackson Hole then at the September FOMC meeting, to deliver more easing to the market.”

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

  • Gold, $1,667.10, Down $1.10.
  • Silver, $30.93, Down $0.04.
  • Platinum, $1,520.00, Down $1.40.
  • Palladium, $635.20, Down $6.00.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! 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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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.

 

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ECB announcement, Fed meeting disappoints markets

 

ECB ANNOUNCEMENT, FED MEETING DISAPPOINT MARKETS

American stock futures gave up some early gains after the European Central Bank (ECB) announcement that eurozone interest rates will remain the same.  While many economists believed that would be the case, it seems investors were hoping for more than that.  ECB President Mario Draghi, during a press conference, reinforced his commitment to the euro, stating that it is an “irreversible” union.  He also called to governments, saying they need to “stand ready to activate bail-out funds.”  Stock futures and Precious Metals moved into the red as Draghi spoke.

The Federal Reserve said yesterday that actions would be taken to stimulate the economy.  Yesterday’s drop in Gold’s price was the biggest in more than three weeks, and was largely due to the lack of announcement by the Fed.  However, buying of Gold by central banks is still supporting the Gold price.  UBS said in a note, “[Central bank buying] has been providing investors with some comfort, that stronger hands are active.”

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

  • Gold, $1,598.40, Down $6.50.
  • Silver, $27.32, Down $0.32.
  • Platinum, $1,394.00, Down $7.30.
  • Palladium, $576.40, Down $7.20.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! 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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