Gold has ended the week with solid gains because of safe haven buying by investors fearful of the future. Uncertainty remains the name of the game on Wall Street as we wrap up another week of trading. Many markets have continued their large back-and-forth swings of the last few weeks.
Monday looked fairly bright due to data released indicating that consumer spending, regarded by many as the main driver of U.S. economic activity, increased 0.8% in July after slipping slightly in June. This data is good news for many investors, as it helped push stock prices substantially higher. It also shows that the U.S. may not be quite as near a recession as was feared recently. Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania said, “It’s a little far-fetched to truly believe that we are headed into another recession. This data doesn’t support that view at all.”
One of the main contributors to the housing crash of 2008 was the sense false of security given when ratings companies gave an AAA rating to subprime mortgage securities. Now S&P has rated a new batch of subprime mortgages as AAA higher than the AA+ rating it gave the U.S. On Aug. 24, Gregory W. Smith, general counsel for the $41 billion Public Employees Retirement Association of Colorado, said, “Everybody has been led to believe…that AAA means AAA means AAA across the board…anybody that didn’t learn in 2008 that (AAA) doesn’t apply should find another line of work.”
Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, said the Fed should be ready to provide more stimuli to the economy, possibly in the form of greater quantitative easing. He cited “the weak data we’ve seen recently and… the rising concern about chronic slow growth.” The first half of 2011 was the weakest six-month period since the recession. However, three other Fed Presidents are against further stimulus; they voted to not approve the Fed statement that stated interest rates would remain low until mid-2013.
Data released on Thursday and Friday overshadowed the bullish optimism from Monday, indicating a slowdown in manufacturing productivity and a complete lack of creation of new jobs. Once again the numbers have fallen below expectations according to the jobs report released Friday morning. Most projections were for between 68,000 -71,000 new jobs to be created, but there were no gains and unemployment holds at 9.1%. Gold and Silver prices moved further up on the news.
Weekly Spot Prices
Spot Gold prices opened this week at $1,799.20. The high was on Friday, Sept. 2nd at $1,884.60, while the low for the week occurred on Monday, Aug. 29th at $1,781.20. Gold ended the week up $89.50 at $1,888.70. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.
Spot Silver prices opened this week at $41.13. Silver reached a high of $43.24 on Friday, Sept. 2nd, while this week’s low for Silver occurred on Monday, Aug. 29th at $40.49. Silver ended the week up $2.24 at $43.37. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.
Spot Platinum prices opened this week at $1,830.30 and ended the week up $56.20 at $1,886.50. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.
Spot Palladium prices opened this week at $759.80 and ended the week up $16.50 at $776.30. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week.
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