Morning Gold & Silver Market Report – 2/21/2012
February 21, 2012PESSIMISM SURROUNDING GREEK BAILOUT
MORE THREATS FROM IRAN
European stocks are trading flat this morning, and U.S. stock futures are pointing to a higher open for Wall Street.  Eurozone finance ministers finally approved a second bailout package for Greece late Monday night, but there is still pessimism surrounding the announcement. This was perhaps best explained by Fawad Razaqzada of GFT in London, who said, “There is a general feeling of relief that eurozone finance ministers finally sealed the deal with Greece, but concerns still linger.”  Private bondholders of Greek debt have agreed to a 53% haircut, which is even higher than the originally-agreed-upon 50%.
Razaqzada also said that one thing investors will be keeping an eye on is oil after Iran blocked exports to Britain and France.  He said, “…the action pointed to rising tensions between the West and Iran.”  Mohammad Hejazi, the deputy head of Iran’s armed forces, said, “Our strategy now is that if we feel our enemies want to endanger Iran’s national interests, and want to decide to do that, we will act without waiting for their actions.”  This comes shortly after Israeli officials said they were still considering an attack on Iran’s nuclear sites.  Iran is also continuing to threaten to shut down the Strait of Hormuz.  Geopolitical tensions have historically been a key driver of precious metals prices.
Precious metals are trading higher, though they have come down from overnight highs.  With the currencies market being the main driver for precious metals prices lately, Citigroup analyst David Wilson believes that “Gold is trading more like the other metals, as a risk asset, rather than a risk hedge.  You’d have thought that all the macro issues would be supportive for gold, when looking at U.S. and European debt, and a slowing China, but it seems to be largely driven by the dollar/euro.”  Citigroup announced that they see gold moving closer to $1,800 this year.  Silver is currently tracking gold after reports that China imported less silver in January than in the past three years, however, Indian imports have increased.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,746.40 – Up $21.50.
- Silver - $33.93 – Up $0.64.