The following is a commentary from APMEXAPMEX Morning Gold & Silver Market Report -- 7/15/2011by Timothy Oakes July 15, 2011
MANUFACTURING DECLINES; S&P JOINS MOODY'S IN POTENTIAL DOWNGRADE
The "Empire State" manufacturing gauge unexpectedly declined for a second month in a row, while the Labor Department reports that the core Consumer Price Index rose 0.3 per cent after a similar gain in May. This was above economists' forecast of 0.2 per cent.
Standard & Poor's (S&P) credit rating service has joined Moody's rating service in their warning of a potential downgrade of U.S. debt. S&P stated yesterday that they see a 50% chance of a downgrade. The S&P had already lowered their outlook on U.S. Aaa long-term rating to negative in April, and the current political debate on whether to raise the debt ceiling does not inspire confidence that a measure will be passed by August 2.
President Obama has suspended budget talks today in order to give both sides time to weigh options and come up with a plan. Talks may resume over the weekend. Financial markets are still uncertain as to whether the two sides will come to an agreement.
Central banks are continuing to buy gold at a record pace. In 2010, central banks became net buyers of gold for the first time in two decades. Anyone was thinking this would be a one-year event would be wrong, as according to the World Gold Council, central banks have already bought more gold in 2011 than they did in 2010. According to Juan Carlos Artigas of the World Gold Council, "In the same way, investors look to diversify their portfolios and find a way to manage risks effectively, gold has been one of the choices with central bankers especially in developing economies to create that balance."
At 8:21 AM CDT, the
APMEX precious metals spot prices were:
Gold - $1,584.40 -- Down $5.90 on the day.
Silver - $38.54 -- Down $0.22.
Platinum - $1,761.00 -- Up $13.30.
Palladium - $778.00 -- Down $7.40.
Mid-Day Gold & Silver Market Report -- 7/15/2011by Ryan Schwimmer July 15, 2011
EURO BANKS FAIL STRESS TEST
Fears abound that the Greek debt crisis is spreading to bigger countries such as Spain and Italy. As a repercussion, investors have been panicking and causing European bank shares to fall to a two-year-low. Eight European banks failed stress tests, while as many as 15 are needing more capital to withstand a prolonged recession. With all that being said, a potential default in Greece has not been added into the equation. This will pile up the losses for German and French banks, which hold a large amount of the country's debt. For those banks that failed, they must produce plans by September as to how they will plug capital shortfalls by the end of the year.
The dollar strengthened for a second day against the euro after a report showed that U.S. consumer prices, excluding food and energy, increased for a second month. Earlier, the Dollar Index took a dive after Standard & Poor's said that even if Congress reaches an agreement on raising the debt ceiling, there is still a 50% chance that the U.S. will lose its top credit rating. "The bar is set very high for more quantitative easing if you can't point to disinflation or deflation, but you actually are pointing to a rise in inflation, some of which is not anticipated," said Alan Ruskin of Deutsche Bank.
President Obama held a press conference today to discuss the progress, or the lack thereof, in the debt ceiling negotiations. Obama made his position clear, stating, "Show me a plan in terms of what you're doing in terms of debt and deficit reduction. If they show me a serious plan I'm ready to move, even if it requires me to make some tough decisions." House Speaker Boehner countered later and said that Obama and the Democrats have "been unwilling to put a real plan on the table. Without serious spending cuts...this problem is not going to be solved."
At 12:07 pm (CT) the
APMEX precious metals spot prices were:
Gold - $1,591.70 -- Up $1.50 on the day.
Silver - $38.96 -- Up $0.21.
Platinum - $1,756.00 -- Down $18.30.
Palladium - $782.80 -- Down $2.60.
Closing Gold & Silver Market Report -- 7/15/2011by Stephanie Chandler July 15, 2011
ANOTHER ONE BITES THE DUST
Precious metals are still going strong, with gold tallying a nine-session gain of almost $108, and a 3.2% gain for the week and silver knocks at the door of $40 an ounce. Some experts are saying that the technical charts for gold based on past rallies see gold reaching $1,750 and ounce. CitiFX's chief technical strategist, Tom Fitzpatrick, said the the next rally in gold should be similar to gold's rally from July through December in 2010.
The danger of a ratings downgrade for the U.S. if a debt limit increase is not approved by August 2nd now threatens to spread to the country's top financial firms. Standard & Poor's has notified a range of finance companies (including Aaa rated insurers, hedge funds, Fannie Mae, Freddie Mac) that if the U.S. loses its Aaa credit rating, the credit rating of those companies could be downgraded as well. S&P also stated that a downgrade of the U.S. rating could happen even if an agreement on the debt limit is reached by the required deadline if the agreement isn't viewed to be a sufficient remedy to the debt situation.
There was news of two Georgia banks being closed by the Federal Deposit Insurance Corp., bringing the total of closed banks so far this year to an astounding 53.
At 4:00 pm (CT) the
APMEX precious metals spot prices were:
Gold - $1,594.70 -- Up $4.40 on the day.
Silver - $39.33 -- Up $0.58.
Platinum - $1,765.60 -- Down $8.70.
Palladium - $786.30 -- Down $0.90.
Posted 07/15/2011 09:53 am
