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.
Enhanced by Zemanta

Markets Fall as Europe Fears Swell

Gold retreated today as Europe continued to fan the flames of fear across the globe.  Markets were in selloff mode, as more than 2/3 of stocks on the New York Stock Exchange lost value and oil fell below $80 a barrel for the first time in eight months.  “Concerns over the prospects of Greece leaving the European Union and the resulting impact on the euro zone’s future economic health had sellers out in force,” said Alan Herbst, a principal at Utilis Advisory Group.

Despite gold’s drop in price recently, many analysts remain bullish on the long-term prospects.  “I remain constructive on gold as a store of value, or an alternative currency, but instead investors are using it as a source of cash or stepping over to go to the more traditional bastions of safety, as in the German bund, the U.S. dollar or Treasurys,”  said Mark Luschini, chief investment strategist at Janney Montgomery Scott. It seems that investors are using gold as an insurance policy, and filing claims to raise their cash positions.

Speculation abounds as to who will be tapped to fill the job of Treasury Secretary once Timothy Geithner steps down after the November elections.  The new secretary will undoubtedly have a full plate of issues to deal with, from a trillion-dollar deficit in the American budget to a debt crisis in Europe and our strategic relationship with China.

At 4 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1562.80, Down $15.30.
  • Silver, $27.86, Down $0.41.
  • Platinum, $1427.40, Down $33.00.
  • Palladium, $596.00, Down $21.60.
Enhanced by Zemanta

Wednesday links: Gold at 10-month low, holds on to $1,500 an ounce

Gold at 10-month low, holds on to $1,500 an ounce (MarketWatch)

Gold & Silver Decline: George Soros Nearly Quadrupled Gold Stake in Q1 (Fox Business)

Slump Persists: Greek Banking Jitters Scuttle Early Rally (Fox Business)

Fund managers reveal “best ideas” at Ira Sohn event (Reuters)

Fed Raises Stimulus Hopes, Treasurys Soar (WSJ)

Enhanced by Zemanta