The eyes of the world are on Washington while Gold spot prices are at record-highs. Investors all over the globe have a stake in the outcome of the debt ceiling negotiations. With each passing hour, the nation moves closer to a crisis and anxiety builds. Markets reflected that anxiety this week. Precious metal prices are up due to safe-haven buying strategies and stocks are down sharply. In fact, the Dow Jones Industrial Average is set for its largest weekly decline in over a year, while Gold pushed to record high spot prices three times this week.
In Hong Kong earlier this week, Secretary of State Hillary Clinton spoke to Chinese investors. She spoke reassuringly that “political wrangling” is a part of democratic problem-solving. She explained that the U.S. is working towards resolving the disagreements and improving the country’s long-term fiscal outlook. She also framed the debt debate as a sort of bump in the road.
The partisan tactics being employed by U.S. political party leaders became clear on Wednesday when both President Obama and House Speaker John Boehner made televised addresses. President Obama clearly showed that the two sides are no closer to an agreement that would allow the U.S. to raise the debt ceiling in order to avoid what most analysts describe as a devastating default. “For the first time in history, our country’s triple-A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet,” he said in remarks late Monday. Obama was quite critical of the Republicans’ unwillingness to compromise but he made it clear that he expects a compromise package on his desk this week.
In his rebuttal, House Speaker John Boehner pointed the criticism back towards the President and the Democratic Party. He categorized the Democratic plan as “full of gimmicks.” There is still the expectation that an agreement will be reached, albeit a short-term one. Their concern is that the credit rating agencies may still downgrade the U.S. credit rating if they see no significant steps taken to reduce long-term debt.
Another concern is the Commerce Department data that reports any economic growth we were experiencing had actually started to wane late last year, not this year as a number of economists’ data implied. Previous reports had the economic growth at 1.9% during the second quarter, but in actuality it only grew 1.3%. According to Ryan Sweet, a senior economist at Moody’s Analytics, “The economy essentially came to a grinding halt in the first half of this year…We did get side-swiped by some temporary factors which are fading, but it raises some concerns about the sustainability of the recovery.”
WEEKLY SPOT PRICES
Spot Gold prices opened this week at $1,600.60. The all-time record high was on Friday, July, 29th at $1,637.50, while the low for the week occurred on Monday, July 25th at $1,600.60. Gold ended the week up $27.40 at $1,628.00. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.
Spot Silver prices opened this week at $40.16. Silver reached a high of $41.47 on Wednesday, July 27th, while this week’s low for Silver occurred on Friday, July 29th at $39.30. Silver ended the week down $0.21 at $39.95. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.
Spot Platinum prices opened this week at $1,799.00 and ended the week down $17.10 at $1,781.90. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.
Spot Palladium prices opened this week at $807.90 and ended the week up $15.40 at $832.30. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week at APMEX.com.
In 2007, the U.S. Mint released the first four coins in a series of Gold First Spouse Coins. These coins are the government’s first 1/2 oz. 24-karat gold coins. They are also the first commemorative 1/2 oz. Gold coins. With a face value of $10, these .9999 fine Gold coins are minted and released annually in the order the First Ladies served in the White House. The First Spouse Coins are minted in Proof and Uncirculated condition. Each First Spouse Gold Coin will coincide with the release of the four annually circulating Presidential $1 Coins.
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