Monthly Gold Market Review: September 2011
Gold declined by a shade over 11 % during the month, as investors were spooked by a raft of bearish news.
First came US employment figures that shocked the market, giving concern that its economy has stalled.
Then, the market was hit by debt worries in Europe, and a lack of clarity shown by European leaders in respect of Eurozone sovereign debt concerns.
IMF downgrades to its global growth forecasts, its assertion that problems in the financial system (banks, governmental, and personal) are more dangerous now than they were in 2008, pushed all investors to the sidelines. The perfect storm of red ink across all asset classes had begun.
Trying to bolster a fading economy, the US Fed announced its latest easing, in the form of its ‘Twist’ Operation. It will be selling short dated securities, whilst committing to buy long dated bonds in June of 2012. The total amount of this easing is $400 billion. The markets do not like the structure, nor do they think that $400 billion is enough to stem the slowing growth.
European Finance ministers, led by Germany, agreed to increase the size of the European Emergency Fund to €440 billion. Further they agreed to move more quickly towards the setting up of the European Stability Fund, and then the European Monetary Fund which would be Europe’s equivalent to the IMF. Germany’s Angela Merkel says that Germany will guarantee $200 billion of Europe’s debt (predominantly Greece).
Gold (Cash) 1629.00 -11.05%
Silver (Cash) 30.25 -27.1%
Platinum (Cash) 1518.00 -17.67%
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