Gold and Silver Prices Decline in Morning Trading

 

Two forces are affecting Gold and Silver prices this morning. One is profit taking as traders take a portion of their profits off the table. The second is the rising U.S. dollar relative to the euro and other currencies. Investors are still digesting Friday’s jobs report, which stemmed the tide of the falling dollar. Today’s meeting of Europe finance ministers will be closely watched. Spain and Greece will be the hot topics. No decisions are expected today, but discussions will be the prelude for the next meeting in Brussels on Oct. 18-19 that will answer whether Spain will ask for a bailout and what to do about the Greek debt.

The situation in Greece has become so volatile that special preparations are being made for German Chancellor Angela Merkel’s visit on Tuesday. Chancellor Merkel’s call for austerity measures is not popular with the Greek populace. Greece is preparing for two days of strikes with over 7,000 plainclothes police and hundreds more undercover agents. Snipers will be stationed on rooftops throughout the city.

Despite recent strong gains in the U.S. stock market, investors are bracing for the worst earnings season since 2009. Analysts are expecting earnings to decline, after 11 quarters in a row of gains. These poor results are attributed to the slower than expected U.S. economic recovery and the overall economic slowdown worldwide.

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

  • Gold, $1,771.90, Down $8.40.
  • Silver, $33.96, Down $0.62.
  • Platinum, $1,684.40, Down $19.80.
  • Palladium, $653.50, Down $10.70.

APMEX’s Account Managers now have extended hours and are here to serve you until 8 p.m. (EDT) Mondays through Thursdays! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

 

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Analyst: Time for QE3

Modern-day meeting of the Federal Open Market ...

Modern-day meeting of the Federal Open Market Committee at the Eccles Building, Washington, D.C. (Photo credit: Wikipedia)

Precious Metals are trading higher this morning in anticipation of the Federal Reserve meeting tomorrow.  After last week’s dismal jobs report, analysts believe the time is now for the Fed to act.  Mike Dueker of Russell Investments wrote, “If many (Federal Open Market Committee) members meant what they said about needing to see ‘substantial and sustainable strengthening in the pace of the economic recover’ in order not to implement a third around of quantitative easing, then it is time to act.

Germany’s Federal Constitutional Court blocked requests for an injunction which would rule German support of the eurozone rescue fund unconstitutional.  German Chancellor Angela Merkel said that the ruling sends “yet another strong signal to Europe and beyond: Germany is accepting its responsibility as the largest economy and reliable partner in Europe.”

The Platinum price is gaining at a much greater pace than other metals today due to the unrest in South Africa.  The top Platinum producer in the world, Anglo American Platinum, is now being affected by striking miners, who blockaded roads leading to shafts.  “Fear of intimidation and threats by unidentified individuals in and around” certain locations caused some non-striking miners to be unable to report for work, according to a statement.

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

  • Gold – $1,738.90 – Up $5.00.
  • Silver – $33.71 – Up $0.15.
  • Platinum – $1,646.10 – Up $38.10.
  • Palladium – $679.50 – Up $4.60.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

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Could Gold Be Set for Its Best Year Since 2012?

In a report on Bloomberg this morning, the prospect that gold might rise to $1800 an ounce by year’s end could extend gold’s gains for the year to over 15%. This would be the greatest gain since the 30% increase in 2010. The speculation for rising prices continues to be the expectation the many world governments from the U.S. to China will enact measures to stimulate their economies, which will increase gold prices as an inflation hedge.

Although there are many who do not expect any major announcement by Fed Chairman Ben Bernanke at this week’s meeting in Jackson Hole, Wyoming, one top Fed official is speaking out for more stimulus. Chicago Federal Reserve Bank President Charles Evans told reporters that the Federal Reserve needs to launch QE3 immediately and keep buying bonds until the jobless rate goes down. “I don’t think we should be in a mode where we are waiting to see what the next few data releases bring” Evans said to the Hong Kong Bankers Club. “We are well past the threshold for additional action; we should take that action now.”

German Chancellor Angela Merkel has asked officials in her coalition to “weigh their words” when they call for a Greece exodus from the euro. According to Chancellor Merkel, these words are very damaging at a time negotiations are at a critical phase. It is clearly her intent to keep the euro intact as is. She also expressed that Greece Prime Minister Antonis Samaras is taking very serious steps to reduce debt. September is seen as a critical month for European leaders as they continue to try and get a grip on this now three-year old crisis.

At 9AM EDT the APMEX precious metals prices were:

  • Gold price – $1,670.40 – down $1.00
  • Silver price – $31.01- up 30 cents
  • Platinum price – $1,546.80 – down $8.60
  • Palladium price – $651.30 – down $2.40

Merkel backs euro, may not back Greece

 

U.S. stock futures received a boost this morning, thanks to German Chancellor Angela Merkel.  Overnight, Merkel reaffirmed Germany’s commitment to the euro, much like what European Central Bank president Mario Draghi said recently.  “With Merkel voicing her support for Draghi’s plans and restating that all measures would be taken to defend the euro, investors are breathing a sigh of relief this morning,”” said Mike McCudden of Interactive Investor.

Speculation that a Greek exit from the eurozone is building today, as Greek Prime Minister Antonis Samaras is scheduled to meet with Merkel today and French President Francois Hollande Saturday.  Recently, there has been talk of Greece seeking to extend their austerity program over four years instead of the originally-agreed-upon two years, which may not sit well with Germany and France, who are reportedly finished compromising with Greece.  Samaras and his political party promised this extension during elections in Greece, and not being able to obtain it may cause further political issues in the country.

Gold and Silver prices have recovered from slight early morning losses on Merkel’s pledge to the euro.  Nick Tevethan of ANZ in Singapore said, “The (Gold) market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range.”  The Federal Reserve’s Jackson Hole, Wyo. meeting at the end of the month is likely to send Gold out of that range.

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

  • Gold, $1,618.90, Up $1.20.
  • Silver, $28.35, Up $0.03.
  • Platinum, $1,458.50, Up $22.30.
  • Palladium, $595.30, Up $10.30.

 

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Will European Central Bank Take Action?

 

Precious Metals prices continue to trade mixed, as many investors are still waiting to see what (if anything) the European Central Bank does this week. “Uncertainty is growing regarding the outcome of the ECB meeting Thursday. In this context, the Gold market may trade largely sideways ahead of the meeting,” said BNP Paribas analyst Anne-Laure Tremblay said. “However, given the publication of U.S. nonfarm payrolls on Friday, any market reaction to the ECB meeting may prove short lived,” she said. While the U.S. Federal Reserve is also meeting this week, most analysts are of the opinion that it will not take any immediate action.

German Chancellor Angela Merkel’s coalition government has rejected issuing a banking license to the European Stability Mechanism (ESM). If permitted, it would provide the ESM access to increased liquidity via the European Central Bank, and proponents contend that might lower borrowing costs. All three parties of Merkel’s coalition have issued statements against the license. “Those who try to circumvent their own rules through the back door lose their legitimacy in the eyes of the public,” said Hans Michelbach of the Bavarian Christian Social Union. “Financing debt by means of the printing press leads to growing inflation dangers.”

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,615.50, Down $6.10.
  • Silver, $28.06, Down $0.07.
  • Platinum, $1,417.10, Up $5.30.
  • Palladium, $590.90, Up $1.80.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.

 

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