US Economy Looking Dim; Gas Prices Down

The price of gold is moving up as the safe haven appeal fully returns with the continued weariness of the eurozone debt crisis worsening.  Cyprus is the fifth eurozone country to ask for assistance from Europe.  The Cypriot government said in a statement, “The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure to the Greek economy.”

Goldman Sachs strategist Jim O’Neil is more concerned with the U.S.A. economy than Europe’s due to America’s fragile condition that seems to be off track.  O’Neil said, “Europe doesn’t run the world.  The second half of the year, unless Europe completely implodes, I’m still in the camp that the markets recover, particularly the U.S. and some of the big (emerging markets) and we could still conceivably see new highs,” he said. “So we shouldn’t get solely focused on the European stuff.”

Gas prices are slowly falling, which in turn is positive for the economy to an extent.  Credit Suisse economist Jonathan Basile  said, “It’s like a stabilizer in the economy, but you also don’t want to see gasoline prices falling persistently because that will tell you there’s got to be something else fundamentally wrong in the global picture.  Gasoline prices are the most visible prices in the economy. People see it…It’s very easy to see lower prices. That’s the good news. But you have to put it into the context of what’s going on.”

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,585.30, Up $17.90.
  • Silver, $27.57, Up $0.80.
  • Platinum, $1,444.50, Up $11.30.
  • Palladium, $608.40, Up $0.20.