Gold coin sales from national Mints fall in Q1

Gold falls on deflation fears, euro debt worries (Reuters)

Gold coin sales from national Mints fall in Q1 (Reuters)

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Spain formally requests EU aid

Uncertainty in Europe has led to American stock futures falling and Precious Metals prices remaining flat.  A two-day European Union summit meeting is set for later this week, but Peter Boockvar of Miller Tabak said that “nothing of substance will come” of the meeting.  He added that German is “just not giving into the requests for largesse that the rest of Europe wants them to disperse in the form of socializing debt obligations in the euro region.”

After informally making the request last weekend, Spain has formally requested aid from the eurozone.  Olli Rehn, the EU’s top economic official, said that it could happen in a matter of weeks, adding, “The policy conditionality of the financial assistance … will be focused on specific reforms targeting the financial sector, including restructuring plans which much fully comply with EU state aid rules.”

Gold seems to be in a holding pattern at the moment.  Macquarie analyst Hayden Atkins said, “The broader picture suggests gold could move a bit lower, but it will stay in this range until we see definitively whether the bulls will be right about the printing presses at central banks ramping up again, or whether they will hold fire until the world gets a lot worse.  It is in a wait-and-see kind of mode,” suggesting that increases in the Gold price are likely, and that it’s just a matter of ‘when,’ not ‘if.’

At 9:26 a.m. (EDT), the APMEX precious metals spot prices were:

  • Gold – $1,573.90 – Up $6.50.
  • Silver – $26.85 – Up $0.08.
  • Platinum – $1,435.90 – Up $2.70.
  • Palladium – $607.90 – Down $0.40.

Time to sound the alarm with Spain?

Precious metals have been generally even to climbing through early morning trading. Investors are wary of world events and slowly re-establishing their safe haven mentality in regards to global and domestic economic situations. The FOMC is set to release a statement tomorrow, which analysts feel are corralling prices for now. Analyst Lynette Tan said, “Ahead of the FOMC meeting, gold bugs will watch for signs of more quantitative easing or an extension of Operation Twist when it ends this month. A failure to confirm more asset purchase or the like could see gold dropping again. For the moment, we expect policy decisions from the Fed to influence gold price more than risk appetite linked to the euro crisis.”

Is it time to sound the alarm on Spain? That’s the question facing the global community, with a call for help so far falling on deaf ears, but is readily apparent in the debt sale attempts. German Chancellor Angela Merkel continues to compromise, but the firm line in the German sand is not sharing the burden with the euro bonds. Spanish Treasury Minister Cristobal Montoro has asked the ECB for its help. However, the ECB continues to put the onus of responsibility on the countries themselves. Spanish Economy Minister Luis de Guindos said, “We think … that the way markets are penalizing Spain today does not reflect the efforts we have made or the growth potential of the economy. Spain is a solvent country and a country which has a capacity to grow… I don’t think things look catastrophic for Spain as eventually some solution will have to be found, or the ECB will have to step in again. It’s in no one’s interest to see Spain bailed out, because then there will be questions as to whether there are enough funds, and questions over Italy.”

At 9:00 a.m. (EDT) – the APMEX Precious Metals spot prices were:

  • Gold – $1,630.70 – Up $3.20.
  • Silver – $28.85 – Up $0.08.
  • Platinum – $1,489.30 – Up $3.20.
  • Palladium – $634.30 – Up $0.10.
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Europe in the Crosshairs of G20 Leaders

First on the list of priorities at the meeting of the leaders of the world’s twenty largest economies is – no surprise here – the financial crisis in Europe that has been stewing for over two years now.  President Barack Obama has scheduled one-on-one meetings with German Chancellor Angela Merkel about the European crisis, and Russian President Vladimir Putin about the conflict in Syria, in which Russia plays a large role as Syria’s primary arms supplier.

Bond yields on Spanish government debt hit a fresh high today, signaling the market’s growing reluctance to continue loaning money to the insolvent country.  Yields topped 7 percent, the highest since Spain joined the Euro.  “By requesting external assistance for the euro zone’s fourth-largest economy, the Rajoy government has pushed Spain, Italy and the bloc as a whole into uncharted waters,” said Nicolas Spiro, managing director of Spiro Sovereign Strategy.  “Politically speaking, the ‘line of credit’ to Spain has already failed.“

Elections in Greece on Sunday failed to calm jittery markets as stocks and commodities turned negative today.  After the pro-Euro and pro-bailout New Democracy party won in Greece, Michelle Gibley, director of international research at the Schwab Center for Financial Research said, “Even though we avoided the worst-case scenario in Greece, the crisis has entered a new and dangerous phase, and it doesn’t end with Greece.”

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

  • Gold, $1,629.30, Up $0.70.
  • Silver, $28.78 Down $0.06.
  • Platinum, $1,484.80, Down $4.40.
  • Palladium, $635.60, Up $4.30.

Gold slightly higher

American stock futures are mostly flat this morning, with many investors seemingly unsure how to react to recent developments in Europe and the U.S.A.  David Morrison of GFT Markets said, “As we have seen many times recently, the previous day’s price action has been reversed in early trading.  Yesterday we saw stocks rally” as a result of J.P. Morgan’s CEO testifying before the Senate Banking Committee.  However, stocks “then tumbled after an auction of U.S.A. 10-year Treasuries,” added Morrison.  While investors believe stocks may not be the safest place for their money, Morrison explained, “An increasing number are coming to the opinion that this continued flight into U.S.A. Treasuries despite pathetic yields is a very bad sign indeed.”  Gold could benefit from this realization, as the metal has historically been a safe haven investment in times of uncertainty.

At a recent bond auction, the yield on 10-year bonds in Spain rose above 7 percent, which was the trigger point for Greece, Ireland, and Portugal when those countries requested aid from the European Central Bank.  Moody’s Investor Service cut Spain’s credit rating by three notches, and now rests one level above junk status.  The pressure is on German Chancellor Angela Merkel to come up with a solution, but she recently shot down what she termed “miracle solutions,” calling them counterproductive and said that they would violate the German constitution.

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

  • Gold – $1,627.50 – Up $8.10.
  • Silver – $29.01 – Down $0.03.
  • Platinum – $1,486.80 – Up $18.00.
  • Palladium – $625.00 – Up $1.80.
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Gold gains momentum & Spanish Yields

Gold continues to march in positive territory during today’s mid-day trading and appears to be gathering momentum. The euro gained ground relative to the dollar and other commodities (copper) are seeing their prices moving up as well. “(We had) a small pop higher in the euro and that was it,” Saxo Bank vice president Ole Hansen said. “The market wants to go higher now and it has taken comfort from the fact that buyers returned fairly quickly after the sell-off last week.”

The U.S.A. stock market is holding on to some gains today while absorbing the impact of Spanish bond yields hitting historic highs. There is still concern over Spanish debt levels and questions about the bank rescue deal. “Into their close, both Spanish and Italian bonds are bouncing off their (price) lows. The daily egg shells we walk on this week over Spain will of course be followed by Sunday’s election in Greece and what, if anything, the FOMC (Federal Open Market Committee) will announce next week,” said Peter Boockvar, at Miller Tabak & Co. The coming election in Greece is being viewed as a major factor in its status in the Eurozone.

At 1:00 p.m. (EDT) – the APMEX precious metals spot prices were:

  • Gold – $1,612.90 – Up $16.10.
  • Silver – $28.96 – Up $0.26.
  • Platinum – $1,454.50 – Up $3.20.
  • Palladium – $623.20 –Down $2.00.
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More European Countries Added to Worry List

Precious metals prices have remained relatively steady, rising a bit during early morning trading. Some analysts feel that the safe haven appeal of gold is borne not of the eurozone worries themselves, but actually what those worries could do to the U.S. economy. According to analyst Nic Brown, “Gold is sitting waiting for something to happen, but I would argue it is waiting for something to happen in the United States, rather than Europe. (We need) more clarity in the United States over whether the economic data is going to improve again…or whether the weakening data is a sign of slower economic growth, and that therefore the Fed will have to do something. For me, the focus is definitely on the U.S. side of the Atlantic. In the meantime, gold is going up, down or sideways dependent on what is going on in the euro/dollar rate, and there isn’t a great deal else that is moving it around.”

In an interesting turn of events, outspoken Austrian finance minister Maria Fekter put Italy right back in the eurozone spotlight with Spain. However, Italy does not have near the exposure that Spain does considering its much lower unemployment rate and lack of banking exposure to the real estate crisis. In Fekter’s opinion, “Italy has to work its way out of its economic dilemma of very high deficits and debt, but of course it may be that, given the high rates Italy pays to refinance on markets, they too will need support.” Meanwhile Italian Prime Minister Mario Monti called her remarks “completely inappropriate.” The nation of Cyprus could also be looking for a bailout, becoming the fifth country to make that request, with its own banking issues bringing the need to light.

At 9:01 a.m. (EDT) – the APMEX Precious Metals spot prices were:

  • Gold – $1,604.80 – Up $7.80.
  • Silver – $28.93 – Up $0.23.
  • Platinum – $1,446.50 – Down $4.80.
  • Palladium – $624.00 – Down $1.60.
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