Precious Metals prices remained volatile but ultimately ended up fairly even Friday, with Gold closing higher. Despite the credit downgrade of banks globally, banking stocks rallied, and the support of growth in the eurozone has helped boost some prices. Broker Phillip Streible said, “There is zero inflation out there. With  Gold being well received as a risk asset, the price is deflated because of the rising dollar.” There is a sentiment that investors will continue to rebuild Gold positions based on the price pullback over the past few days.

After a high level meeting today in Rome, the leaders of France, Italy, Spain and Germany came to an initial agreement to support a growth initiative in the eurozone. They agreed to contribute about 130 billion euros to support the growth. Italy’s Prime Minister Mario Monti said, “Growth can only have solid roots if there is fiscal discipline, but fiscal discipline can be maintained only if there is growth and job creation.” Dissent over euro bonds continues. French President Francois Hollande supports the measure, while German Chancellor Angela Merkel continues her dissent on the topic. In a shot across the bow of Germany, Hollande said, “I consider euro bonds to be an option … but not in 10 years. There can be no transfer of sovereignty if there is not an improvement in solidarity.”

The  banking downgrades had very minimal impact to the markets, as American stocks continued their upward trend today. Strategists and analysts agreed the effect was minimal. Strategist Jeffre Saut, “The bad news is out, and it was not as bad as expected. … They had been telegraphing the bank downgrades for a long time. Why does anybody pay any attention to those rating companies? They missed it during the financial crisis.” Analyst James Leonard said, “The banks have gotten so much better in the last few years in terms of capital, yet their ratings keep going down. What does that tell you? That the ratings were so wrong before.”

At 5:15 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,571.60, Up $7.60.
• Silver, $26.93, Down $0.02.

Precious Metals prices dropped throughout the day Thursday, largely on the Federal Reserve’s disappointing announcement and the late-day credit downgrade to a number of international and domestic banks. Analyst Nic Brown said, “Since August, September, Gold has been trading like any other commodity. The one thing that will support prices this year is the potential for further aggressive monetary stimulus in the United States, whether it is QE or a new policy. … The Fed may be forced into doing something. The fundamentals in the U.S. may be improving … but the European situation is managing to drag everyone else down with it.” However, according to the bank Fairfax, “The recent sell-off (in Gold) could well prove to be excessive  … if risk aversion rises again in the coming months.”

Moody’s downgrade of 15 international and domestic banks had been anticipated by the banking industry but still is throwing a wrench in the plans, as the downgrades do affect the lending costs of these banks. Another key indicator of the downgrade is the banks that weren’t downgraded. Some observers said Moody’s intent with this downgrade was to, in some sense, laud the banks that are stable with secure bank deposits from its customers. Citigroup wrote, “The new ratings landscape could provide a competitive edge for higher rated firms. … Markets tend to discriminate more between issuers at lower ratings -- in terms of funding costs -- particularly during times of stress.” The fact that these banks were flagged previously helped to minimize market impact, but market impact is still felt.

At 9:01 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,569.00, Up $3.40.
• Silver, $26.91, Down $0.04.

Precious Metals prices are feeling the effects from the Federal Reserve’s announcement Wednesday that there would not be further stimulus at this time, with prices dropping. Analysts and investors are cynical in their  outlook for the American economy and commodities. Kyle Cooper at IAF Advisors said, “It doesn’t look like the economy is taking off anytime soon, and oil demand is pretty poor.” Today, the Gold price experienced its biggest drop today since April 4 it dipped 3.1 percent. 

Federal Reserve Chairman Ben Bernanke said yesterday he’s concerned about the cost associated with easing programs. Bernanke said, “We’re prepared to do more. We have to get additional information on the state of the economy, what’s happening in Europe.” Bernanke’s statements Wednesday created speculation among many investors that QE3 will be likely with one more weak United States data report. 

At 5:07 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,566.10, Down $50.20.
• Silver, $26.94, Down $1.56.

Although quantitative easing (QE) was not announced, the extension of the Fed’s Operation Twist has dropped Precious Metals prices for the time being. The outlook for Precious Metals remains tied to any Federal Reserve indication of further QE, as well as the European economic situation. Adviser Bill O’Neill said, “At least for the near term, it’s mainly a short term negative for Gold because it indicates that there won’t be immediate and new aggressive accommodation, and certainly no QE3 at all judging from this statement.” However, in a note to its investors, Commerzbank analysts wrote, “It is quite possible, though, that the current June high at $1,641 will be surpassed this week and that the 50 percent retracement of the February to May decline and the  200 day moving average at $1,668 will be reached  before another medium term down leg rears its head.”

Wednesday’s announcement led to a lot of market volatility, in both Precious Metals and the stock markets. Investors are concerned with European debt crisis resolution and the Operation Twist extension and what it really means to the markets. The Fed cut 2012 growth estimates, and concerns heighten over the unemployment data.  However, further QE is not ruled out. Chief investment officer Eric Teal said, “It’s not all bad news, but caution is warranted. If the Fed saw significant deterioration, the policy response would have been on a larger scale. Yet there’s increased risk to the economic outlook.”

Greece finally has put together a coalition government behind newly sworn in Antonis Samaras and the promise from politicians to negotiate more agreeable terms so as to maintain the international flow of bailout money. Another crucial element that is damaged is the people’s dignity within Greece. After being sworn in, Samaras spoke to reporters and said, “I am fully aware how critical this time is for our nation. I know very well that Greek people are hurt and need to regain their dignity. I know that the economy must quickly recover to re-establish social justice and cohesion.” This is a truly daunting task that faces Samaras, putting together a cabinet, overcoming perceived political shenanigans and overcoming the economic tumult from previous leadership.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,608.70, Down $15.00.
• Silver, $28.18, Down $0.29.

American stock futures are trading slightly higher this morning, while the Gold price has dropped.  This movement comes ahead of a highly anticipated Federal Reserve policy decision that could bring about a new round of quantitative easing. Nick Beecroft of Saxo Capital Markets U.K. said that while QE is the hope of the markets, the Fed is more likely to announce an extension of Operation Twist, its bond-buying program. “This will probably disappoint equity markets, which seem to be expecting ‘another shot of heroin,’” he said. The Fed announcement is expected at 12:30 p.m. (EDT).

European leaders fleshed out a list of concrete steps to potentially solve its debt crisis  at the Group of 20 (G20) summit, with the G20 leaders supporting what the eurozone brought to the table. United States President Barack Obama said that it was clear that the leaders know what steps need to be taken to shore up the debt crisis, adding, “None of them are going to be a silver bullet that solves this thing entirely … in the next week or two weeks or two months, but each step points to the fact that Europe is moving towards further integration rather than breakup.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,605.60, Down $18.10.
• Silver, $28.20, Down $0.27.

Precious Metals prices have remained stable throughout the day following this morning’s trends with little movement. Federal Reserve Chairman Ben Bernanke is set to hold a news conference Wednesday, where additional easing measures are expected to be announced. Anne-Laure Tremblay from BNP Paribas wrote in a note to clients, “Probable actions include interest rate cuts by the European Central Bank and the People’s Bank of China (and) further quantitative easing by the Federal Reserve,” she said, adding that such action would likely support Gold buying. “Quantitative easing, or an expansion of a central bank’s balance sheet, is  more favorable for Gold prices  … (as it) tends to have a strong negative impact on the U.S. dollar and is also more likely to raise inflationary expectations.”

As the Federal Reserve continues its two-day policy meeting tomorrow with a hopeful resolution to stimulate America’s economy analyst Dick Bove is patiently waiting, but not quietly. Bove considered what a third round of quantitative easing would actually do for the financial system he said, “It seems clear that the United States economy’s growth is slowing and that the global economy is facing major challenges. This suggests a need for some action by the Federal Reserve and other central banks,” Bove said in a note to clients. “It also appears to be just as evident that  lowering interest rates to zero and printing more money are not effective options.”

At 5:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,619.50, Down $8.00.
• Silver, $28.47, Down $0.30.

Precious Metals prices have been steady or rising through early morning trading. Investors are wary of world events and slowly re-establishing their safe haven mentality regarding global and domestic economic situations. The Federal Open Market Committee is set to release a statement Wednesday. Analyst Lynette Tan said, “Ahead of the FOMC meeting, Gold bugs will watch for signs of more quantitative easing or an extension of Operation Twist when it ends this month. A failure to confirm more asset purchase or the like could see Gold dropping again. For the moment,  we expect policy decisions from the Fed to influence Gold price  more than risk appetite linked to the euro crisis.”

Is it time to sound the alarm on Spain? That’s the question facing the global community, as a call for help has so far fallen on deaf ears. But alarm is readily apparent as Spain attempt to sell debt. German Chancellor Angela Merkel continues to compromise, but the firm line in the German sand is not sharing the burden with the euro bonds. Spanish Treasury Minister Cristobal Montoro has asked the European Central Bank for its help. However, the ECB continues to put the onus of responsibility on the countries themselves. Spanish Economy Minister Luis de Guindos said, “We think … that the way markets are penalizing Spain today does not reflect the efforts we have made or the growth potential of the economy. Spain is a solvent country and a country which has a capacity to grow. … I don't think things look catastrophic for Spain, as eventually some solution will have to be found or the ECB will have to step in again.  It’s in no one’s interest to see Spain bailed out, because then there will be questions as to whether there are enough funds, and questions over Italy.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,630.70, Up $3.20.
• Silver, $28.85, Up $0.08.

First on the list of priorities at the meeting of the leaders of the world’s 20 largest economies is -- no surprise here -- the  financial crisis in Europe  that has been stewing for over two years now. President Barack Obama has scheduled one-on-one meetings with German Chancellor Angela Merkel about the European crisis, and with Russian President Vladimir Putin about the conflict in Syria, in which Russia plays a large role as Syria’s primary arms supplier. 

Bond yields on  Spanish government debt  hit a fresh high today, signaling the market’s growing reluctance to continue loaning money to the insolvent country. Yields topped 7 percent, the highest since Spain joined the euro. “By requesting external assistance for the eurozone’s fourth largest economy, the … government has pushed Spain, Italy and the bloc as a whole into uncharted waters,” said Nicolas Spiro, managing director of Spiro Sovereign Strategy. In criticism directed toward the government of Spanish Prime Minister Mariano Rajoy, Spiro said, “Politically speaking, the ‘line of credit’ to Spain has already failed.”

Elections in Greece  on Sunday failed to calm jittery markets as stocks and commodities turned negative today. After the pro-euro and pro-bailout New Democracy party won in Greece, Michelle Gibley, director of international research at the Schwab Center for Financial Research, said, “Even though we avoided the worst case scenario in Greece, the crisis has entered a new and dangerous phase, and it doesn’t end with Greece.”

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,629.30, Up $0.70.
• Silver, $28.78, Down $0.06.

No, this is not referring to Sunday night’s NBA Finals Game 3 between the Miami Heat and the Oklahoma City Thunder. It’s about the Greek election, which could prove to be one of the most important economic events in the world this year. For a small country, Greece is going to have a major effect on the global economy.

Why is the  outcome of this election  so important? It will tell the world whether Greece intends to pay its debts and stay in the eurozone, or go its own way. Here is the dilemma in a nutshell: Greece is running out of money and may not be able to pay its bills by the end of this month, which is why it needs another bailout. Greece probably will not get another bailout without agreeing to austerity measures. Many Greek citizens do not support austerity measures, and Greece cannot agree to anything without a majority coalition government, which it does not have. If Greece again cannot form a majority coalition, then another election will be called, but Greece would run out of money before that could happen.

The best outcome for the markets is if the New Democracy party wins. That party’s candidate supports austerity and staying with the euro. A win would bolster the euro against the American dollar, which could boost equity markets as well as Precious Metals.

The bad for markets outcome would be a win by the Syriza party. It is expected its leader will not accept austerity measures. This could set markets into a potential roller coaster as the Syriza regime would be playing high stakes poker with Germany and the International Monetary Fund.

Stay tuned! There’s a big game Sunday!

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,628.30, up $8.70.
• Silver, $28.79, up $0.29.