Precious metals roared back this week after consolidating in the previous week.
Gold gained $58.50 on the week closing at $1,541.50. As measured by the London PM Fix Price, gold reached a closing high this year of $1,552.50 on June 22nd and has stubbornly refused to decline. Gold’s technical position looks excellent and a breakout above June’s high should set the stage for the next major advance.
Meanwhile, depending on how you look at it, the comedy or tragedy unfolding in Europe continues as insolvent nations line up for handouts. The credit rating agencies are falling over each other in a race to downgrade the debt of country after country, adding Portugal’s debt this week to the status of junk paper. Quite a difference from how they bestowed A+ credit ratings on every piece of toxic mortgage paper produced by the banks prior to the financial crisis.
As Europe keeps center stage on the debt crisis, attention has been diverted from some other looming train wrecks, including Japan, the world’s third largest economy. From a debt standpoint, Japan is in solid first place for the highest ratio of debt to GDP of almost 250%. Can Europe forestall a debt crisis by piling up even more debt like the Japanese? Who knows, the story is still unfolding, but the one certainty is that not only Europe, but the entire world is moving inexorably to a major financial crisis as debt burdens reach the level where massive defaults become the only option.
Investors in gold, meanwhile, can take comfort in the fact that gold has no credit risk.
Silver rebounded strongly this week, closing at $36.28, up over 7% on the week. Prior to this week’s rally, silver had declined for three consecutive weeks, dropping by $4.10 per ounce.
Platinum rally strongly, climbing $32 to $1,740, after a $12 advance in the previous week.
Palladium jumped $26 or 3.5% on the week to $776, continuing last week’s rally of $11.
| Precious Metals Prices | |||
| PM Fix | Since Last Recap | ||
| Gold | $1,541.50 | +58.50 | +3.94% |
| Silver | $36.28 | +2.43 | +7.18% |
| Platinum | $1,740.00 | +32.00 | +1.87% |
| Palladium | $776.00 | +26.00 | +3.47% |
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