Precious metals stayed in a narrow holding pattern while Europe continues to work at untangling the mess in Greece.
Gold was up $7.24 to $1,726.64 and silver was up $0.17 to $33.71 as the euro gained ground against the dollar.
Europe keeps struggling to get their recovery off the ground as finance ministers struggle to close the deal on Greek sovereign debt. What’s that? You thought there was already a deal on the table to get Greece its bailout money? Really, that was two whole days ago. What happened in the meantime is the austerity measures knocked the props out of Greece’s GDP, which shrank another 6.8 percent in 2011. That makes the budget cuts a moving target for finance ministers, who now say Greece has to come up with another 325 million-euros in reductions.
It does point out that the time to cut government spending is not during a recession. Ironically, the best time to cut government spending is when revenues are flush and the economy is booming, the time when there is the least compulsion by lawmakers to introduce austerity measures. The situation in Greece is now being compared to Argentina and Latvia, two countries that defaulted on the debts and saw their GDP drop by 25 to 40 percent.
The uncertainty of the situation in Europe is what is keeping gold trading in a narrow range. Demand is staying high, as it typically does in times of uncertainty, but that demand is balanced out by growing optimism in the rest of the global economy, particularly the U.S. Investors want to shift to risk on investments, but just can’t bring themselves to do it.
For now, expect gold to trade in a narrow range between $1,710 and $1,730. That will last until there’s some news to move prices one way or the other.
In Other News: The Theological Experts at Salon Magazine Claim Jesus was a Communist | Michael Schaus
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 1st, 2014 | John Ransom
In Other News: WH Daily Intel Briefings Are Optional? Obama Attends Fewer than Half | Michael Schaus
In Other News: Ukrainians Demolish Statue of Lenin – Putin Offers Statue of Himself as Replacement | Michael Schaus
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for September 29th, 2014 | John Ransom
In Other News: Hey White People! All GOP Policies Apparently Designed to Kill Black People | Michael Schaus