Gold ticks slightly higher

Gold Ticks Higher Ahead of ECB, Fed Events (WSJ)

Gold eases, focus shifting to key economic events (Reuters)

Gold Being Sold Aggressively in India as Prices Near Record (Bloomberg)

Spain’s Bankia may get less aid than sought-sources (Reuters)

Dow Snaps Four-Day Losing Streak as Service-Sector Index Rises (WSJ)

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Credit Dries Up for Spanish Banks

Spain may be required to accept a bailout soon as the country’s Treasury Minister told Spanish radio listeners today that it’s “technically impossible” for Spain to bail itself out. Spanish banks are suffering from an overload of debt from the country’s bursting housing bubble that was fueled by cheap interest rates after Spain joined the eurozone. Bond yields on Spanish sovereign debt have tipped near the 7% mark that signals markets are anticipating a default, and have been trading at 5.48% premium to safe-haven German bonds, indicating reluctance to loan the government more and more money. Spain will attempt to issue $2 billion more euros in debt on Thursday, which will be a test of market sentiment.

Famed hedge fund manager George Soros estimates Europe has three months to address the crisis. “The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government,” Soros said. “Nothing can be done without German support.” While he does not expect a full-blown collapse of the euro, Soros expects Germany’s economy to weaken and the resolve of German citizens to soften to the point that they will be increasingly resistant to assist with further bailouts. Soros, a noted gold bug, rose to fame in the early 1990’s by betting against the British pound, earning him the title, “The Man Who Broke the Bank of England.”

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

  • Gold, $1,617.60, Up $4.20.
  • Silver, $28.57, Up $0.48.
  • Platinum, $1,437.20, Up $7.90.
  • Palladium, $624.30, Up $10.30.
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Housing and eurozone boost Gold’s safe haven appeal

Precious metals prices have been on quite the journey today, but as the eurozone issues continued to simmer and the disappointing domestic housing data was released, the early morning losses were replaced with gains throughout the

stock market

stock market (Photo credit: 401K)

mid-day and afternoon. Portfolio manager James Dailey said, “This morning’s reversal is indicative that people are starting to come to grips with the fact that there isn’t any fast and easy solution in Europe. And if things start to really get out of hand in Spain and Italy, that means gold can catch a bid.” Platinum price was also down with other industrial metals due to economic concerns.

The news out of the eurozone still involves Greece, but has really picked up with concerns building for Spain. Spanish banks continue reeling over the burst property bubble and flailing stock markets surrounding the banking sector. EU Economic and Monetary Affairs Commisioner Olli Rehn has offered a couple of options for the Spanish government to consider, including another year to work out a solvent budget or direct financial aid to distressed banks. In a move of concern the U.S. Treasury sent top official Lael Brainard to speak with Greece, Germany, Spain and France.

Domestic stock markets fell on disappointing housing data, Greece’s future in the euro currency and the solvency of Spanish banks. Overseer Hayes Miller said, “It’s a high-anxiety market… We’re not anywhere near the end of Europe’s debt crisis. In the U.S., economists are making the point that if housing were to stabilize, consumption could grow. The question is: what’s going to allow the housing market to stabilize?”

At 5:05 p.m. (EDT) – the APMEX Precious Metals spot prices were:

  • Gold – $1,563.60 – Up $13.10.
  • Silver – $27.97 – Up $0.09.
  • Platinum – $1,402.60 – Down $27.50.
  • Palladium – $608.00 – Up $2.00.
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Tuesday links: Gold falls after early gains

Gold falls over 1 percent in heavy volume, euro slides (CNBC)

US Stocks Advance; DJIA Notches Triple-Digit Gain (WSJ)

Americans’ Confidence Is Down. Why? (BusinessWeek)

Euro cut to near 2-year low on Spain bank angst (CNBC)

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Gold Ends Higher for the First Day in Five

After closing lower for four consecutive trading days, gold prices rebounded today after hitting a 10-month low.

Oil prices continued to decline today, providing some welcome relief to American consumers. “We had soft economic data and European concerns weighing on equities and oil is being pulled along lower,” said Jason Schenker, president of Prestige Economics LLC. “Elevated concerns about the European story and disappointing U.S. economic data have been the story for two weeks now.”

Moody’s is set to announce downgrades of several Spanish banks this evening. According to a source with knowledge of the issue, the key reasons for the downgrades are rising loan defaults, a renewed recession, restricted funding access and the reduced ability of the government to support lenders. The Spanish newspaper El Mundo reported yesterday that customers of the Spanish bank Bankia SA had withdrawn more than 1 billion euros from the bank since the government announced it was taking over the bank on May 9. Bankia SA and the Spanish government denied that a bank run was underway, but markets hammered Bankia’s share price nonetheless.

Ahead of tomorrow’s G8 summit at Camp David, Barack Obama is urging European powers to ease austerity policies and adopt a growth strategy. The newly elected president of France, François Hollande, is expected to support Obama’s argument. Hollande defeated incumbent Nicolas Sarkozy by campaigning against austerity measures, which are deeply unpopular in some European countries.

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

  • Gold – $1,575.20 – Up $37.10.
  • Silver – $28.08 – Up $0.80.
  • Platinum – $1,454.00 – Up $19.80.
  • Palladium – $604.00 – $7.90.
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