Daily Bullion Market Update 6/16/11
By Barry Stuppler – MintStateGold.com
Today’s domestic and oversees gold trading was within a narrow range from $1,520 to $1,534 watching developments in Greece (See Greek austerity program below) and other PIIGS country debt trading. At 11am PDT gold was trading at 1,529.30, up $3.30 an ounce from yesterday.
New Greek austerity measures
- Hiking the VAT from 19 percent to 21 percent (worth 1.3 billion euros)
- One-off corporate tax (1 billion)
- Cutting “holiday bonuses” by 30 percent (740 million)
- 2 percent supplemental gas tax (450 million)
- Freeze on state pensions (450 million)
- Reducing bonuses and pay by 7 percent for public sector employees (360 million)
- 2 percent supplemental cigarette tax (300 million)
- Supplemental electricity tax (250 million)
- One-off tax on vacation homes and oversized properties (200 million)
- Cuts to pension subsidies (150 million)
- Supplemental tax on luxury goods, e.g. yachts and cars worth more than 35,000 euros (100 million)
Other measures include: an additional 1 percent tax on income over 100,000 euros, reducing government overtime hours by 30 percent, cutting public-sector benefits 10 percent, and taxing the commercial activities of churches. And it’s still not quite enough — Greece needs an additional bailout to help it pay off debt due this spring. Are there some good ideas in this austerity programs for our Federal and State governments?
A wider Euro market deterioration is possible as Sovereign Credit-Default Swaps rates are moving to record highs not only for Greece, but for Portugal and Ireland, too. The Eurozone may be able to put in a short term fix in place for now, but the markets are saying the problem is going to get worse.
At 11am PDT silver is unchanged from yesterday trading at $35.70 per ounce in very active trading.
Silver is unchanged today and was up 22 cents yesterday, and both days the silver mining stocks dropped, which is reaffirming Monday’s article on the dis-connect between mining stocks and physical silver. If you didn’t read the article on Monday here is a direct link.
Eric Sprott (Sprott Physical Silver Trust) isn’t convinced it was weakening fundamentals that led to last month’s sharp decline in the silver price. Rather, Sprott is a believer in the conspiracy theory that some major financial institutions were in cahoots with each other to manipulate the price of silver lower. Sprott said that it could have been large banks unsatisfied with their current silver holdings. JP Morgan Chase and HSBC Holdings PLC have been accused of manipulating the silver market in the past and are two favorite targets of conspiracy theorists and silver bulls alike for talk of silver market manipulation
Today’s Other Important News:
- The U.S. current account deficit widened to $119.3 billion in the first quarter (3.2% of gross domestic product) from $112.2 billion in the fourth quarter, the Commerce Department reported Thursday.
- The number of U.S. workers who filed new applications for unemployment benefits fell by 16,000 last week to a seasonally adjusted 414,000, the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 430,000 from an originally reported 427,000.