News from both Europe and the US may have differing effects on the gold bullion market.
(1888PressRelease) September 08, 2011 - MIAMI, FL - Bill Hionas is CEO of Pan American Metals of Miami, which operates in Miami, Florida, trading in precious metals bullion. Investors in the precious metals market may be forgiven for being a tad nervous at the moment. Gold has been behaving with unusual volatility, causing some investors to wonder if it is, indeed, offering a safe haven. It is worth taking a look at some of the factors currently affecting the gold bullion market.
Gold tends to rise in price when the global economy is perceived to be in trouble and stock prices drop. There are ongoing sovereign debt concerns in Europe and there has been disappointing news for the economy in the US, with lower than anticipated growth figures and high unemployment. All these things combine to drive investors to the perceived safety of gold. However, there have been some significant changes in the European situation. Doubts had been cast regarding Germany's willingness to participate in a bailout for Greece but news broke today that a German court ruling allows Germany to support the bailout, hence removing pressure - temporarily. It should be borne in mind however that the debt situation in the euro zone is still very uncertain.
At the same time we have the news that the Swiss National Bank, in a desperate attempt not to attract safe-haven investment to the Swiss franc, has said it will enforce a minimum exchange-rate target to the euro. Early moves suggest that the Norwegian krone may step in to take the place of the franc as a new safe haven; interest rates are high and the country has a relatively solid economy but this remains to be seen. Meanwhile the euro has fallen as a result of SNB's action, which should swing the pendulum back in the direction of precious metals as the preferred safe haven.
Closer to home, President Obama is promising fairly drastic action to increase jobs and stimulate growth, a move that would decrease the need for an investment safe haven. Yet there is still a very real fear of further quantitative easing from the Federal Reserve, which would have the opposite effect.
Overall, it seems unlikely that there will be any huge change in the current trends; gold may see some fairly severe swings but the overall trend will remain bullish.
About Bill Hionas:
Bill Hionas is CEO of Pan American Metals of Miami, LLC, a group of traders, investors and brokers who combine many years of experience to help clients invest in bullion. PAMM provides an individual investment service and is based in Miami, Florida for convenient access to both North and South American investors.
News from both Europe and the US may have differing effects on the gold bullion market. 
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