The price of gold has bounced back in some fashion over the last 24 hours, hurtling back above $1,550 and now probing the $1,600 mark. Silver is also on a tear and is back trading around $28.50. One swallow doesn’t make a summer, however, and given the continuing euro zone tensions, which include confirmation that the European Union is working on an emergency plan to handle a Greek exit from the euro, these gains could be lost on a short-term basis if we see another bout of U.S.-dollar buying.
Philly Fed Data Boosts Prices
Precious metals were helped higher by news from the Federal Reserve Bank of Philadelphia, confirming that U.S. business activity is again slowing. The bank’s Business Outlook Survey registered negative readings for the first time since last September. Couple that with the biggest drop in the Bloomberg Consumer Comfort Index in 14 months and its little surprise that pessimism is growing, which means more spikes in gold and silver as expectations grow that the Fed will again be firing up its printing press.
In Europe, German Chancellor Angela Merkel is also said to be “open” to new suggestions about stimulus plans for Greece, and has again stated that she has “the determination to keep Greece in the euro zone.” All of this of course increases the likelihood of the ECB engaging in efforts to cheapen the euro. Meanwhile across the Channel, Bank of England policymaker Adam Posen suggested that the BoE’s latest £125 billion quantitative easing splurge may not be “enough”, and that further QE may be needed as the UK economy remains weaker than expected. The gold bears won’t be laughing too much longer.
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Gold's Up In A Big Way
Published 05/20/2012, 05:40 AM
Updated 05/14/2017, 06:45 AM
Gold's Up In A Big Way
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