Greek Fears Escalating, USD Strength Weighing on Gold and Silver
Tuesday, March 6, 2012
Greece is again front and center as the question of whether enough private sector
creditors will accept the second bailout offer of a 53% writedown. If less
than 75% tender their bonds, collective action clauses would be triggered.
The fear is that this would cause a "credit event" that would lead to payouts on
credit default swaps. The implications of such an action are unclear, but
there is fear that this could cause a finacial cascade throughout the global financial
Meanwhile, concerns over global growth remain elevated following today's news that
Europe's fourth quarter GDP fell 0.3%, and yesterday's announcement that China is
targetting GDP growth of 7.5%. The USD continues to power higher, and has had
a steady rise from last Wednesday. The EUR-USD was down .77% at 1.31146.
Precious metals continued to falter, with gold breaking below the $1,700 level and
silver falling below $32 per troy ounce.
Spot gold prices were down $29.42 at $1,677.30 per troy ounce. Spot silver
prices were down $0.99at $33.03 per troy ounce. The gold-silver ratio is again
above 50, now at 50.83.
Equities had a bad day as well, with Dow losses topping 200
points. The S&P 500 was down just over 1.5%.
Portugal increasingly looks fragile, and could be the next weak link to require
further bailout funds. Yields on Portuguese government debt continue to rise,
Bloomberg reporting that the 10-year borrowing cost rising 2% in the last
two weeks to 13.83%.
The ECB's balance sheet now tops 3 trillion EUR. This follows last Wednesday's
second LTRO which saw the ECB lend 529.5 billion EUR.
Qualcomm (QCOM) said it would buyback up to $4billion in shares. Shares of
QCOM were dragged lower in today's downturn, off $0.55 at $61.56 per share.
Today is Super Tuesday for the Republican primaries. 10 states are up
for grabs, including Ohio, Massachusetts, Virginia, Tennessee, and Vermont.
Mitt Romney continues to fall short in his attempt to garner the lead spot
among the remaining contenders.
Gainesville Coins is having a special on fractional American Gold Eagle
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Disclaimer: Gainesville Coins "Market Updates and In the News Section"
provide our readers with features and analysis of the financial markets, and some
of the factors that may be affecting market direction. While the information is
obtained from sources we believe to be reliable, we do not guarantee its accuracy
or its completeness, and this information should not be considered investment advice.
Gainesville Coins provides these articles for informational purposes only, and they
do not constitute a recommendation by Gainesville Coins to hold, to purchase, or
to sell any investment.