9.16.11 Weekly Recap

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APMEX made national headlines this week when Donald Trump accepted 3 Gold bars for an APMEX New York City Office. Donald Trump stated, “The legacy of Gold as a precious commodity has transcended to become a viable currency and an accepted universal monetary standard. Central Banks around the world are holding Gold as a reserve asset. It is also a terrific, potentially lucrative diversifier in a portfolio, especially with such volatility in the stock market.”

Gold is closing this week lower than it started, having backed off the record highs of the previous few weeks.  Earlier in the week, Gold dipped with stocks due to traders who cashed in on their Gold holdings to cover losses in other markets.  Later in the week, with more optimism surrounding Europe, investors became more comfortable with riskier assets.  This is reflected in the current higher stock prices and lower Gold prices.  Despite the optimism in the market, there are still many concerns yet to be addressed in the U.S. and world economies.

Concerns in Europe are set up like dominoes.  There were rumors that Greece would default on its debt this past weekend. While that didn’t happen, the issues in Greece are well-known.  French banks are at risk of large losses if Greece does default. Germany’s finance ministry is planning to bail out its major banks if Greece defaults.  Last Friday’s resignation of the European Central Bank’s Chief Economist, Juergen Stark, has a place in the situation also.

Traders were worried about credit downgrades for European financial institutions. After a recent review, Moody’s Investors Service downgraded the credit ratings of two prominent French banks, Societe Generale and Credit Agricole.  The credit review was part of the reason for the recent tumbling European stocks.

It seems the market may be growing more comfortable with the Greek debt situation.  World leaders are working diligently to keep Greece from economic ruin; they are creating a plan to provide much-needed liquidity to European banks.  Traders’ confidence seems to be buoyed by the news.  Global stock indexes rose today as investors sell some of their safe havens (like Gold) to purchase riskier assets.  David Wilson, an analyst at European bank Societe Generale, told CNBC, “[T]here must be a bit more positivity for holding riskier assets… I still think the general trend for Gold is upward, but it’s a saw-toothed pattern and at the moment, we’re on the downside.”

The European Central Bank (ECB) has announced that it will coordinate with several of the world’s most prominent central banks on a campaign to provide banks with the U.S. dollars needed to avoid funding deficiencies.  With U.S. money market funds and other dollar lenders worried about the threat of default by Greece, some banks have found it difficult to get dollar funding for extended periods.  According to the ECB, “The European Central Bank has decided, in coordination with the (U.S.) Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year.”  In response to the ECB announcement, both the euro and shares in European banks jumped dramatically.

Concern is growing that the job plan proposed by President Obama last week could lead to another showdown with Congress over increasing the debt limit.  The President’s job plan would lead to $447 billion in additional spending before the November 2012 election.  This would cause the deficit to go over the amount agreed upon back in August of this year.  According to Robert Bixby, the Concord Coalition’s executive director, “The irony of all this is that…they may have to confront it (raising the debt limit) again soon because the deficit might be a great deal higher than we were anticipating.”

The Federal Reserve will reportedly discuss “Operation Twist” at their meeting next week.  This is a plan to shift weight in the Fed’s balance sheet more towards long-term securities as opposed to short-term debt. Michelle Meyer, an economist for Bank of America Merrill Lynch, said, “That sends a signal the Fed is still active in supporting growth.”  The Fed is keeping a close eye on the debt situation in Europe as well as problems in the U.S., such as the troubling 9.1% unemployment rate.

Weekly Spot Prices

Spot Gold prices opened this week at $1,861.70. The high was on Monday, Sept. 12th at $1,865.20, while the low for the week occurred on Friday, Sept. 16th $1,765.40. Gold ended the week down $48.30 at $1,813.40. 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 $41.50. Silver reached a high of $41.60 on Monday, Sept. 12th, while this week’s low for Silver occurred on Friday, Sept. 16th at $39.46. Silver ended the week down $0.77 at $40.73. 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 $1,838.50 and ended the week down $24.80 at $1,813.70. 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 $739.20 and ended the week down $2.90 at $736.30. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week.

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The 2011 Gold Mountie is the newest in the line of The Royal Canadian Mint’s top-notch Gold products.  At .99999 fine, the Gold Mountie is among the purest coins ever minted.

Issued to honor the rich history and tradition of the Royal Canadian Mounted Police, the 1 oz Gold Mountie is a perfect marriage of rough and regal, of tenacious and triumphant. The reverse of the coin embodies the true spirit of the Mounties. An upright, smartly-dressed officer rides at a full gallop proudly displaying the colors of the Royal Canadian Mounted Police. The front of the coin shows Queen Elizabeth II surrounded by the national symbol of Canada, the maple leaf.

The Royal Canadian Mint used their incredible talents to construct a brand-new design for the 2011 Gold Mountie coin. Surrounded by a 12-sided border, both Queen Elizabeth II and the Mountie hold their heads high. A mesh design behind the figures adds a sense of depth and movement to the coin. At .99999 fine, the 2011 Gold Canadian Mountie coin is a marvel of modern minting.

Balance your portfolio with the 4th asset class of Gold today.

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