21 December 2011

Gold 'does not offer comfort in liquidity crunch', European banks could not refuse ECB's 'free money' offer

Silver bullion fell to $29.29 per ounce – having briefly passing the $30 mark – as the Euro fell against the Dollar following news that European banks borrowed a total of €489 billion at the ECB's 3-Year Longer Term Refinancing Operation, which settled Wednesday morning.
The LTRO – through which the ECB offered to lend to banks for three years against collateral that includes distressed Eurozone government debt – saw 523 bidders.
The ECB offered the loans at a rate of 1%.
"It was obviously an offer the banks could not refuse," says Laurent Fransolet, head of fixed income strategy at Barclays Capital in London.

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