By Barry Stuppler – MintStateGold.com
With the Euro Group finance ministers postponing a decision on another Greek rescue package until mid-July, gold is still acting as the safe haven for capital. At 11am PDT, Gold is trading at $1,541.10 an ounce, surprisingly up $3.10 on a stronger U.S. Dollar (versus the Euro) and lower Crude Oil prices.
European governments failed to agree on releasing a loan payout to spare Greece from default, pushing the country to pass laws to cut the deficit and sell state assets. Decisions on the next payout and a three-year follow-up package were put off until early July. Luxembourg’s finance minister Jean-Claude Juncker said on Sunday that a new bailout package for Greece would be dependent on whether the Greek parliament managed to pass a new austerity package.
As of 11am PDT, Silver is trading up .20 cents at $36.05 per ounce. Trading is light with the focus on the U.S. economy and any inflationary aspects to a Euro bail out. If the Eurozone bails out Greece, will Portugal, Ireland, and Spain be far behind? Are we going to see a very inflationary Eurozone quantitative easing (QEE)?
Silver is unique in that it acts both as a precious metal and an industrial metal. As a precious metal it moves up when the economy sours, and down when the value of the U.S. Dollar improves. As an industrial metal, its applications account for about 55 percent of the overall fabrication demand for silver, according to metal consultancy group GFMS, and that demand is growing. Silver is a good conductor of electricity, so it is used in televisions, computers, mobile phones, and other essential electronics.
As the week begins, two things are clear: US Federal Reserve Chairman Ben Bernanke is preparing for his second press conference this year, and that there is no resolution yet to the debt crisis gripping Greece. Bernanke will speak early on Thursday morning New Zealand time after the Fed’s policy committee releases a statement on the state of the US economy and what the central bank plans to do about it. Most market watchers are not expecting any changes in strategy.