Profit Taking Pulls Down Stocks, Precious Metals


U.S. stock futures and Precious Metals are down slightly this morning, as investors are taking profits on the recent gains.  News of a downgrade to the outlook for Greece’s sovereign debt rating also affected the markets, as the EU and International Monetary Fund seem less likely to provide more bailout funds to the troubled country.  Also, the Bank of England paved the way for another round of quantitative easing for its country, cutting growth and inflation forecasts.

At least one analyst believes that the recent market rally is actually just setting up the stock market to fall.  “I think we’re in choppy waters and that continues,” Charlie Morris of HSBC Global Asset Management said.  “You need to trip the market to have a proper collapse.  So you almost need to set it up with a rally, get everyone excited and then it can fall.  If there are risks, the risks to a very negative market come after this rally fades.”  In the long-term, traditionally, steep stock market losses are supportive of the Gold price.

The main topic supporting the price of Precious Metals right now is still the possibility of future monetary easing by the U.S. and the eurozone.  Richcomm Global Services senior analyst Pradeep Unni said, “Gold seems to be supported by hopes that Europe and the United States would launch more stimulus measures to help shore up their faltering economies.  Investors are betting that the festering debt crisis in the eurozone could push the ECB to launch a new round of bond-buying soon.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,608.40, Down $2.40.
  • Silver, $27.90, Down $0.30.
  • Platinum, $1,403.70, Down $7.70.
  • Palladium, $586.50, Down $3.20.


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Gold Climbs Higher


Gold prices have made a significant move upwards today due to uncommonly positive news from Europe. Andrey Kryuchenkov, an analyst at VTB Capital summed it up by saying, “The (European Central Bank) comments that the (European Stability Mechanism) can eventually get a banking license and a pronounced euro rebound against the U.S. dollar drove gold prices to 2-1/2 week highs.”

The good news out of Europe today could be short lived. Reports from Spain and Greece are far from positive. In Spain the debt is getting to the point of needing a full bailout. In Greece, the problem is paying on the bailout they have already received. Greece’s Prime Minister Antonis Samaras was quoted as saying, “There are certainly delays in this year’s agreed program, and we must quickly catch up.” Another official speaking on condition of anonymity was much blunter, as the official said, “The debt-sustainability analysis will be pretty terrible.”

The issues in Europe have not gone unnoticed by the United States Treasury Secretary Tim Geithner. It has been seen that when a large global economic power such as Europe struggles, the effects are seen worldwide. “The economic recession in Europe is hurting economic growth around the world and the ongoing financial stress is causing a general tightening of financial conditions, exacerbating the global slowdown,” Geithner said in testimony before the House Financial Services Committee.

At 1:00 pm (EDT), the APMEX precious metals spot prices were:

  • Gold, $1606.90, Up $28.70.
  • Silver, $27.40, Up $0.50.
  • Platinum, $1400.50, Up $13.90.
  • Palladium, $565.50, Up $2.90.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 7 p.m. (CDT)! Or call us Fridays until 5 p.m. (CDT)! If you have any questions about investing in precious metals or simply would prefer to place your order by telephone, we are here to help.


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Euro tanks as Spain. Greece issues resurface


Renewed worries of a deepening eurozone debt crisis have sent the euro to a two-year low against the American dollar, and Precious Metals are following the former downwards.  Jeremy Stretch of CIBC said, “What began as a Spanish banking bailout looks to be moving rather quickly towards a possible sovereign bailout.  Overlay that with increasingly negative news on Greece and you get a fairly negative mix, so the path of least resistance for the euro is down.”  Spanish bond yields rose to the highest levels in the history of the euro.

The bad news out of Greece comes from reports that the International Monetary Fund (IMF) will no longer provide additional financing for the country.  Greece could be broke by September if it does not receive additional aid from the IMF.  The problem is Greece not being able to (or simply refusing to) meet goals set by the Troika in order to receive aid.  German Finance Minister Wolfgang Schaeuble said, “If there were delays, Greece must make up for them.”

“Dr. Doom” Nouriel Roubini believes that the U.S.A. economy is still on a downward slope.  After saying that rosy forecasts by economists are out of line, Roubini said, “In 2013 … as some tax cuts are allowed to expire, disposable income growth and consumption growth will slow.  The U.S. will then face not only the direct effects of a fiscal drag, but also its indirect effect on private spending.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,569.30, Down $15.20.
  • Silver, $26.86, Down $0.53.
  • Platinum, $1,392.90, Down $21.60.
  • Palladium, $565.40, Down $11.70.


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Precious metals under pressure; Euro keeps falling

Gold is continuing its downward trend during midday trading, as the euro continues to fall and a resolution to the problems in Spain and Greece remains unseen. “Gold looks fragile at the moment,” BNP Paribas analyst Anne-Laure Tremblay said. “It could rebound if U.S. durable goods orders disappoint tomorrow, as the market would then anticipate a greater probability of the Fed easing.” American consumer confidence and outlook data have both hit lows for the year.

The European stock market closed lower on concerns over waning American consumer confidence and lackluster interest in a recent Spanish debt auction. The European Union is also coming under fire from Germany for focusing too much on plans that include debt sharing. “Stocks have ended in a soft manner today, with clients holding back from taking on risk ahead of the EU summit later this week,” wrote Ishaq Siddiqi, a market strategist at ETX Capital in London. “Worries that leaders are set to disappoint continue to grow, as Germany refrains from its stance on euro bonds.”

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

  • Gold, $1,574.10, Down $15.80.
  • Silver, $27.11, Down $0.54.
  • Platinum, $1,432.50, Down $8.70.
  • Palladium, $594.10, Down $14.20.
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Europe in the Crosshairs of G20 Leaders

First on the list of priorities at the meeting of the leaders of the world’s twenty largest economies is – no surprise here – the financial crisis in Europe that has been stewing for over two years now.  President Barack Obama has scheduled one-on-one meetings with German Chancellor Angela Merkel about the European crisis, and Russian President Vladimir Putin about the conflict in Syria, in which Russia plays a large role as Syria’s primary arms supplier.

Bond yields on Spanish government debt hit a fresh high today, signaling the market’s growing reluctance to continue loaning money to the insolvent country.  Yields topped 7 percent, the highest since Spain joined the Euro.  “By requesting external assistance for the euro zone’s fourth-largest economy, the Rajoy government has pushed Spain, Italy and the bloc as a whole into uncharted waters,” said Nicolas Spiro, managing director of Spiro Sovereign Strategy.  “Politically speaking, the ‘line of credit’ to Spain has already failed.“

Elections in Greece on Sunday failed to calm jittery markets as stocks and commodities turned negative today.  After the pro-Euro and pro-bailout New Democracy party won in Greece, Michelle Gibley, director of international research at the Schwab Center for Financial Research said, “Even though we avoided the worst-case scenario in Greece, the crisis has entered a new and dangerous phase, and it doesn’t end with Greece.”

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

  • Gold, $1,629.30, Up $0.70.
  • Silver, $28.78 Down $0.06.
  • Platinum, $1,484.80, Down $4.40.
  • Palladium, $635.60, Up $4.30.

Morning Gold & Silver Market Report, 6/18/2012


American stock futures, Gold, and Silver are all trading flat or lower this morning. Optimism from Greece’s election is wearing thin thanks to renewed worries from Spain. In Greece, Sunday’s election seems to be a victory for a pro-austerity party, though investors seem to be waiting for more information from Spain before they get too excited. Steen Jakobsen of Saxo Bank said, “The market knows this is about buying time, and as the main story is now Spain … we need more details on banking reports and Germany’s intention. It’s more concerning that (shortly into the European trading day), Spain is back in focus.”

Commerzbank analyst Eugen Weinberg said, “It seems the market is still in a negative mood, so we are still expecting the slide on the commodity markets to continue. This is definitely helping Gold.” This month has seen Gold move as a safe haven once more after seemingly losing some of its safe haven appeal in recent months, and this is likely because of hints from the Federal Reserve about further quantitative easing in the United States.

Ashraf Laidi of City Index said he believes the Fed will announce more financial stimulus this week. “One reason we expect the euro to push higher has nothing to do with Greece. We think the Fed is going to open the door to further stimulus on Wednesday.” The stimulus could come in the form of extending the Fed’s unpopular “Operation Twist,” which is scheduled to end this month.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,619.90, Down $8.20.
  • Silver, $28.41, Down $0.43.
  • Platinum, $1,486.00, Down $3.20.
  • Palladium, $630.30, Down $1.10.

Greek Election Has Investors Poised To Act

Precious Metals are on the rise this morning ahead of what is viewed as a key Greek election. Global investors are most likely moving from their cash positions to the safe haven of Gold. Analyst Andrey Kryuchenkov said, “Not many will dare take on fresh longs ahead of the weekend given Gold’s peculiar behavior recently, when it swings back and forth with or against risk sentiment.” In a note to its investors, HSBC wrote, “The next big event in the Gold world is likely to be the Greek election. Gold may be caught between the election and U.S. monetary expectations.”

Worldwide central banks stand poised to take action based upon Sunday’s Greek election. European Central Bank President Mario Draghi has hinted at poor economic conditions as a result of this election and is poised to act. He said, “There are serious downside risks here. … This risk has to do mostly with the heightened uncertainty.” The seriousness is evident as not only the ECB is poised to act, but countries including Japan, England and other G20 nations are preparing to stabilize the global impact. And although since his election, and differing views, French President Francois Hollande has taken Germany to task but shares the same view when it comes to Greece and Sunday’s election when he said, “But I have to warn them, because I am a friend of Greece, that if the impression is given that Greece wants to distance itself from its commitments and abandon all prospect of recovery, there will be countries in the eurozone which will prefer to finish with the presence of Greece in the eurozone.”

American markets are also holding firm ahead of the elections, as well. Strategist Peter Boockvar said, “Ahead of Sunday’s election in Greece, central bankers stand ready, again. With all the water central banks have expended out of their fire hoses over the past few years in their attempt to ‘do something,’ I can only think of magic candles — those candles you blow out that only flare up again immediately after.” The G20 is set to meet next week in Mexico, and financial leaders are expected to discuss the weakest global economy since 2009.

At 9:01 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,625.00, Up $5.40.
  • Silver, $28.76, Up $0.25.
  • Platinum, $1,497.00, Up $7.40.
  • Palladium, $634.70, Down $1.20.