Gold and silver rally
The precious metals markets were dull yesterday until right before the US session when all four attracted bids and rallied quickly. In the hour before the NY open, it appeared that fresh funds poured into the market as black box systems reallocated portfolios for the new quarter. Combine that with the fact that mining companies had just finished previous quarter end sales, and it was the right environment for a very rapid rise in the precious metals in a short time span. In just that one hour, 28,500 lots of the active front month gold (December) contract traded which equates to nearly $5 billion. The yellow metal rallied to a new record high for 2012 at $1,792 before slowly trailing off later in the session as profit taking came into the market.
In news today thus far, unemployment in Spain increased by approximately 80,000 in the month of September. This is twice as much as the increase in August and a very real reminder of how bad things are there. In conjunction with this news, Reuters is reporting that the Spanish government is ready to ask for an official bailout as soon as this coming weekend. This situation should be closely monitored and officials are citing that German Chancellor Angela Merkel does not want to present another bailout band-aid to her increasingly exasperated parliament. In all likelihood though, it will go through just like every other bailout package and delay of debt payments we have seen over the past few years in Europe.
