Gold being pulled in both directions


 

Precious Metals prices recovered slightly after two economic reports were released this morning. United States housing starts and jobless claims were worse than expected. Economists expected housing starts to rise slightly, but they fell by 1.1 percent. Economists also expected a rise of about 1,000 in new jobless claims, but the real result was slightly higher at 2,000. These reports could give the Federal Reserve more ground for another round of quantitative easing (QE), about which some are expecting a decision later this month.

Physical demand for Gold is taking a hit in India now. That country has been the world’s largest consumer of Gold, in large part due to its high demand for use in jewelry. The two factors that are playing into the softening demand are an increase in import duties and a weak Indian rupee, which drives the local price of Gold higher. Combined with a stronger dollar and weaker euro, the rest of the world is seeing the Gold price hover around $1,600 per ounce. With currency trade on one end and the desire for a safe haven investment on the other, Gold seems to be tugged by both sides at the moment, waiting for a potential announcement on QE from either the United States Federal Reserve or the European Central Bank.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,608.30, Up $3.20.
  • Silver, $27.97, Up $0.05.
  • Platinum, $1,402.60, Up $5.40.
  • Palladium, $580.40, Up $0.90.

 

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