The 19th European Summit finally produced a result that was market moving in the positive. Not that what they agreed to is 1) binding or 2) enough to solve anything, but it was enough for the markets to respond favorably and alleviate some of the negativity that has had all markets clenched with fear for the last two months. Gold (AMEX:GLD), after being beaten with the ugly stick on Thursday in preparation for the already known outcome of the EU summit due to the extreme worry over debt deflation in Spain and Italy, popped on the news immediately up to $1595 per ounce. It was held at that level until just before the COMEX (NYSE:CME) close at which point the shorts covered into the long weekend and the price crested $1600 before relaxing back to $1598 on the August contract.
Silver (AMEX:PSLV) was up $1.18 to $27.47 and is still under serious pressure with initial downside support at the $26 level. The resolution in Europe will require more money to be printed which is what the summit pledged to Italy and Spain. The question still overhanging the markets will be how far Chancellor Angela Merkel and the Germans are willing to go without a stronger fiscal compact and control over the economies of the peripheral European countries so that this never happens again.
And all of this was the intention of the architects of this abortion Union from the beginning.
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