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.

 

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Gold Prices Pause Awaiting Bernanke Testimony

Fed Chairman Ben Bernanke will give his semi-annual testimony before a Senate panel on Tuesday and the House Financial Services Committee on Wednesday. Although investors will be keeping a close watch for any mention of QE3, it is expected the Mr. Bernanke will once again scold/warn politicians that we are rapidly approaching a financial cliff, if Congress fails to act soon. This cliff could be as much as $720 billion as tax breaks expire on December 31 and automatic spending cuts kick in January 1. At this time, there appears little chance that Congress will act prior to the November elections. Mr. Bernanke should make it clear that QE3 is still on the table if the economy continues to deteriorate, but many analysts feel he will wait until his Jackson Hole speech in August, before brings up the subject of QE3.

Big banks doing bad things are once again in the news. The U.S. Justice Department is investigating potential criminal charges against big banks and individuals for manipulating key global interest rates. Libor is the London interbank rate that is set by a small and select group of major banks. Barclays Bank has already been fined $450 million for fixing Libor. Other banks being investigated include Citigroup, J.P. Morgan Chase, the Royal Bank of Scotland and Deutsche Bank AG. There is also the question of whether regulators knew about the situation, but turned a blind eye.

Retail sales fell for the third straight month in June, further eroding confidence in a fragile economic recovery. Analyst expected retail sales to rise by 0.2%, but data released this morning by the Commerce department shows spending slipped by 0.5%. This report could raise hopes the Federal Reserve will have to come in sooner or later with a new round of quantitative easing.

At 9AM EST the APMEX precious metal prices were:

  • Gold price – $1,590.60 – down $2.90
  • Silver price – $27.35 – down 10 cents
  • Platinum price – $1,421.90 – down $13.30
  • Palladium price – $582.90 – down $3.80
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