Gold News from Morgan Gold

By James O'Dell

February 21, 2012, Los Angeles – The price of Gold rose 0.67 percent or $11.50 to close at $1,734.80 an ounce on Monday, while U.S. markets were closed in observance of Presidents Day and the euro hit a one week high against the dollar on hopes of a Greek bailout deal. The price of Silver advanced 0.01 percent or $0.81 to close at $33.53 an ounce, while the Gold/Silver ratio edged down to 51.74 as Silver outperformed Gold.

Greece moved one step closer to averting bankruptcy when euro area finance ministers reached agreement on a second bailout package Monday evening, following a day of intense negotiations. Finance ministers managed to hammer out an award to Greece of 130 billion euros ($171 billion) in aid, tap the European Central Bank (ECB) for a profits transfer, and convince reluctant private investors to provide more debt relief while avoiding the first disorderly default in the eurozone's brief 13 year history.

Focus will now shift to making sure Greece gets past the crucial 14.5 billion euro bond repayment due in less than 30 days. Gold immediately moved above the $1740 level on the news, before moderate profit taking kicked in when the International Monetary Fund (IMF) and European officials suggested that in a worst case scenario, it's possible Greek debt could still balloon to 160 percent of GDP, an unsustainable level. The bailout's ultimate success hinges on how well private investors accept changes to the parameters for a "voluntary" swap of their Greek bonds.

"All is still pending what the reaction of the private sector" will be, said German Finance Minister Schäuble. The Greek government has already warned that it may enact a new law applying "Collective Action Clauses" to the bonds, retroactively, to force through the debt restructuring, if necessary. Forcing the issue would normally carry the risk of being declared a coercive restructuring, instead of a voluntary one, by ratings agencies.

 In this case, that risk is reduced by a deal between Greece and the ECB, and the fact that Greek banks now using Greek bonds as collateral against current loans with the ECB, will receive fresh non-defaulted bonds to replace them in the debt swap. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth in 2012.

Widely recognized Gold and Silver bullion coins and bars can be bought and sold quite readily at Morgan Gold and they can be easily stored in a safe-deposit box if needed. Did you know you can add physical Gold to your IRA?  Hear Edmund C. Moy, former director of the U.S. Mint, now representing Morgan Gold, speak on Gold and your retirement. Call 1.800.585.1773 and let our team at Morgan Gold help you diversify your portfolio today. Ask about our new Self Directed IRA. 

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