Gold prices holding steady

With all the negative global economic news being reported, Gold is holding steady. While the news from Europe and its global effects seem to dominate the headlines, Gold is quietly holding its place. The larger question is not the situation in Europe, but how that might affect the United States economy. “(Federal Reserve Chairman Ben) Bernanke, in comments made to the Congress committee last week, seemed to be intimating that QE was off the table, but I wonder if, (as) Europe continues to drag, the likelihood of QE continues to grow. That in itself should be supportive for Gold,” Citigroup analyst David Wilson said.

Talk in Europe has focused on Greece and the major economic turmoil unfolding. There has been talk of an exit from the European Union by the Greeks. However, Vitor Constancio, vice president of the European Central Banks, says such a move would have a dire outcome. “I cannot imagine a country to leave the euro and survive. For that country (Greece) in particular, it would be catastrophic.”

Reports released today showed retail sales fell for the second straight month in the United States. Taking that information and adding it to other recent reports such as employment and manufacturing data, they all show that American recovery efforts are slowing. As it slows, the talk of more monetary easing picks up. “We still believe the Fed would prefer to wait a bit longer on QE3 to see how the domestic and global situations play out, but the weak data certainly strengthen the argument for action,” said Michelle Girard, senior economist at RBS in Stamford, Conn.

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,616.40, Up $2.60.
  • Silver, $28.99, Down $0.06.
  • Platinum, $1,468.10, Up $11.70.
  • Palladium, $623.50, Down $0.80.
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