July 11, 2011
Gold is expected to rise today in Asian trade after EU boss Herman Van Rompuy called for an emergency meeting of top dogs to deal with the prospect of the EU’s third largest member falling victim to the spreading debt crisis.
Gold for immediate delivery was traded at $1544.07 an ounce in Singapore while U.S. gold for August delivery was at $ 1541.64 an ounce on the Comex division of Nymex, according toCommodity Online.
In addition to new fears in Europe, the price of gold is set to climb higher on news of weaker-than-expected payrolls data last Friday. The data is another signal that the U.S. economy has not turned around despite rosy predictions by the Federal Reserve.
The anticipated rise in gold is tempered by a retreat in other metals. Commodity Online also reports silver for immediate delivery dropped 0.4 percent to $36.56 an ounce, Palladium shed 0.4 percent to $774.75 an ounce, and Platinum declined 0.2 percent to $1,733 an ounce.
EU bureaucrats scrambled today following a Friday sell-off of Italian assets. Italy has the largest sovereign debt ratio relative to its economy in the euro zone after Greece and the activity on assets signals the Mediterranean nation’s financial decline. A report on the health of European banks is due on July 15, according to Reuters.
“We can’t go on for many more days like Friday,” a senior ECB official said. “We’re very worried about Italy.”‘
Italy’s economic problems reveal the severity of the financial crisis. The EU initially attempted to limit the debt contagion to Greece, Ireland, and Portugal. Spain avoided a fall by implementing “fiscal reforms” demanded by European bankers.
It now appears the eurozone is headed for a full-blown Argentine-style debacle. The financial crisis that took down Argentina was the result of a decade of IMF and World Bank free market reforms. The South American nation did not emerge from its economic crisis until it regained control of its currency.
Greece will not escape the burden placed on its economy unless it defaults on its debt and exits the eurozone. The same holds true for Portugal, Spain, Ireland and now Italy.