New York 29/06/2012 - Gold rallied strongly on Friday alongside nearly every commodity and equity, after the European Union announced a 120-billion-euro stimulus package for "fast-acting" growth measures and laid the groundwork for a regional banking union.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange was last up $44.80, or about three percent, at $1,595.20 per ounce. Trade has ranged from $1,551.30 to $1,601.30; bullion was even higher
During the two-day EU summit in Brussels, French and Italian leaders pressured Germany to take more aggressive, growth-focused steps to stabilize the eurozone financial sector.
Early this morning, eurozone leaders agreed to create a single supervisory body, one that would act much like the FDIC in the US, to oversee banks in the region.
The new agency will be able to access the European Financial Stability Facility or the European Stability Mechanism directly without adding to governments' debt, which should bring down Italy's and Spain's spiralling borrowing costs.
Shortly after the release, Spain's 10-year yield fell 38 basis points to 6.56 percent, while Italy's 10-year note declined 33 basis points to 5.86 percent.
"Essentially, what has happened is that Germany has flinched, but it has done so, we would assume, after receiving assurances that it is and it shall in the future be the dominant player in this tenuous partnership," Dennis Gartman, an economist and editor of the Gartman Letter, said.
"The world is breathing a huge, collective and world-wide sigh of relief, for although we've gone to the brink of the cliff, the Germans have chosen to walk back from that cliff and the euro has soared; stock markets everywhere are flying to the upside; commodities are materially higher and bond markets are falling. Disaster is averted and the music is playing once again," Gartman added... Please call for current strategies, or to receive our latest informational package on precious metals......Thank-you
Peter R.....Southern Trust Metals, Inc. Toll free 1-877-448-0080
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