Daily Bullion Market Update 10/05/11
By Barry Stuppler – MintStateGold.com
There’s a Bull/Bear war occurring on the world’s commodity exchanges, and after hitting $1,595 per ounce in Asia, trading gold appears to have found support and increased demand. Gold’s inverse relationship with the equity markets appears to have changed, and fresh news about the Eurozone debt crisis (See below) that’s interpreted as positive for stocks and bonds, now can be seen the same way in the precious metal markets. Gold was trading at $1,640.20, up $23.40 per ounce at 11am PDT.
Hopefully, Silver has stopped searching for a bottom. Last night Silver hit $28.41 per ounce before we saw substantial buying. Silver continues to actively trade above and below the important $30 price level. At 11am PDT silver was trading at $30.40 per ounce, up $0.54 for the day.
European Debt Crisis Update
The EFSF (European Financial Stability Facility), set up in May of last year, and used to bail out Ireland and Portugal, will be allowed to lend governments enough Euros to recapitalize banks once it secures new powers needed to be ratified by all governments involved. Think back three years ago when TARP (Troubled Asset Relief Program) was passed by U.S. Congress to bail out or recapitalize U.S. Banks. Multiply the problem by five PIIGS countries needing approval from 17 Eurozone nations. However, this time, the estimate is 3 Trillion Euros ($4 Trillion US Dollars) needed to bail out banks and countries over the next 2-3 years, not $700 Billion required for TARP. The fact that most banks paid back TARP with interest, has been positive in securing passage in the Eurozone nations.
Angry and frustrated, Greek civil servants walked off the job Wednesday, paralyzing the government and public transport in protest of ever-deeper austerity measures and seemingly ineffectual financial policies. Greece struggles to avoid catastrophic default while demonstrators in Athens expressed outrage over their misfortune and bewilderment at a crisis that shows no signs of easing.