Tuesday 17 May 2011

US HITS DEBT LIMIT, HALTS CREATION OF NEW DEBT

APMEX Market Commentary 05-16-2011 | Gold & Silver Market Reports, News and Commentary

http://www.apmex.com/Commentaries/430/Mid-Day-Gold-Silver-Market-Report-5-16-2011.aspx

News and Commentaries

Mid-Day Gold & Silver Market Report – 5/16/2011

By Stephanie ChandlerMay 16, 2011
US HITS DEBT LIMIT, HALTS CREATION OF NEW DEBT – Treasury Secretary Timothy Geithner advised congress this morning that the US has reached the maximum debt limit established by congress. As of now, the government is essentially borrowing from itself to fund operations through August 2, when the “extraordinary measures” now underway will cease to be able to fund operations, and government shutdown would commence. Congress is now facing an important decision: either allow the US to default on some of its debts or raise the debt limit. Both would be unpopular and risky decisions, and this just months before election campaigns are in full swing. It’s a classic “rock-and-a-hard-place” scenario, but waiting until the 11th hour could prove disastrous, even if a solution is found.
Currencies have been unsteady this morning as investors are trying to determine how news of rape allegations against IMF head Dominique Strauss-Kahn will affect the euro. There are worries that since he is the primary in charge of the IMF’s portion of the bailouts for the Eurozone nations , if he is taken out of the picture for a while so might Portugal and Greece. The euro was doing well in the morning trade which hurt the dollar and pushed the metals higher. Randy Warren, chief investment officer of Warren Financial Service, says that, “as soon as the crisis in Europe begins to face once again… I think the dollar will get weaker,” which will be good for gold and silver.
At 12PM (CT) the APMEX precious metal prices were:
  • Gold price - $1,494.00 (up $1.10)
  • Silver price - $34.18(down 92 cents)
  • Platinum price - $1, 760.50 (down $9.80)
  • Palladium price - $717.50 (up $7.00)


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