With Capital Leaving Euro Zone The Crisis Deepens
August 10, 2012
By James O'Dell
August 10, 2012, Los Angeles – The price of Gold rose 0.28 percent or $4.50 to close at $1,616.40 an ounce in thin trade on Thursday, as uncertainty over which steps the Fed and the European Central Bank (ECB) will take next to bolster their economies, continues to limit a stronger move in Gold. The price of Silver advanced 0.36 percent or $0.10 to close at $28.10 an ounce, while the Gold/Silver ratio, the number of ounces of Silver it takes to buy one ounce of Gold, inched lower to 57.52, as Silver outperformed Gold.
Consumer inflation in China slipped to a 30-month low in July, suggesting the People’s Bank of China (PBoC) could follow up on recent rate cuts to boost the economy. Ronald Leung, of Lee Cheong Gold Dealers said investors are expecting China to reduce bank reserve requirements while injecting fresh cash into the market."There was a hope that the stimulus that has been put in place would start to drive things in the third quarter, but there is nothing in these data that suggests the (Chinese) economy is really picking up," said Adrian Foster at Rabobank.
"Gold and Silver are a bit higher on expectation of more [quantitative easing] after the weaker Chinese data, and they are getting some technical buying as prices stay above $1,600," said Phillip Streible, of R.J. O'Brien. "You are going to need big volume to get the metal moving. The path of least resistance to the upside is going to need those stimulus measures to come true," said Streible.
Meanwhile, in the euro zone, investors have been looking for a safe place to stash their cash as confidence in the euro continues to plummet and the debt crisis moves into its third year. According to Thomas Kressin of Pacific Investment Management Co., capital is leaving the euro area and it is signaling “another storm” that's about to hit the single currency. “Now there are growing signs that the crisis of confidence in the euro zone has assumed a new dimension,” Kressin wrote.
“Whereas initially investors fled to the safety of the euro zone’s core, now they are taking their capital out of the eurozone altogether.” 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.
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