Morning Gold & Silver Market Report – 8/19/2011
By Peter LaTona August 19, 2011
Gold Continues to Soar as Recession Fears Escalate – Gold, silver and platinum prices are all sharply higher in overnight trading. Gold prices and December gold futures all hit record highs. Overseas equity markets were battered again overnight and U.S. stock futures are poised for a negative opening. Yesterday was a day of more disappointing economic data in the U.S., so with today being day of no new data, the markets look to Europe anticipating more bad news from the European banking system. Ed Groshans, Managing Director of Financials at Height Analytics said yesterday on “Closing Bell”, “If we do have a major sovereign debt issue…these banks in Europe, they need to recognize the true value of the sovereign debt. We can’t keep fooling ourselves that it’s 100 cents on the dollar. There are some hits that have to be taken, and it has to come through capital, and until we do that, you have counterparty credit risk, and you won’t know what it is until we take our medicine.”
J.P. Morgan has once again cut its growth estimates for the U.S. economy. They also warned that the risk of recession is “clearly elevated”. Their economists slashed fourth-quarter growth from 2.5% to 1% and their first-quarter 2012 from 1.5% to 0.5%.