Money printing leads to Gold being a 4th quarter winner


Gold and Silver prices are recovering from early morning losses after the release of economic data in the U.S. Consumer spending in the country rose more than it has in the past six months, up 0.5 percent last month. However, personal income and the U.S. savings rate both disappointed. This is something that the Federal Reserve hopes to improve with its latest round of monetary easing, a policy that leads analysts to predict Gold as a likely winner for the fourth quarter of the year. “As governments print more and more money, all commodities are rising in price as measured in those currencies,” said James West of Midas Letter Opportunity Fund. “The more money printed, the less investors are going to value paper assets and the more they will seek to hold the real assets” like Gold and other commodities.

An audit of Spanish banks is expected to be completed today. The eurozone’s third largest economy has seen much trouble lately, hit hard by the housing crisis.  Citizens of Madrid protested the austerity measures announced yesterday, and one region of the country even threatened to break away from Spain. The overwhelming expectation is that these measures are the first part of Spain formally requesting a bailout from the European Union. At one point, Spain was feared as “too big to fail,” or at least too big to bail out, so it will be interesting to see how the EU handles this situation.

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

  • Gold, $1,778.50, Down $1.00.
  • Silver, $34.77, Up $0.10.
  • Platinum, $1,671.40, Up $23.60.
  • Palladium, $643.10, Up $6.70.

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