Analyst Predicts Ongoing Easing Through 2013

Gold and Platinum prices are mostly flat this morning, while Silver and Palladium are down slightly. Analysts continue to say that the high physical demand in Asia is one of the driving forces behind Gold’s price, though it seems the major topic is quantitative easing (QE) around the world. Recent comments from central bank officials have supported ongoing QE in many regions, as seen yesterday when a European Central Bank official confirmed the eurozone’s monetary policy stance “for as long as necessary.”

Roubini Global Economics’ Managing Director of Research Christian Menegatti chimed in, saying, “We are talking about 2014, in terms of winding down quantitative easing. We’ll have to wait much longer for rate hikes… well into 2015 and maybe towards the end of (that year).” The driving force behind Gold being stuck just below $1,600 has been fear that QE could be coming to an end soon, but these views seem to refute that. In a recent CNBC poll, over 70 percent of voters said they were still buying Gold instead of selling it.

At 9:10 a.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,593.60, Down $0.10.
  • Silver, $29.15, Down $0.09.
  • Platinum, $1,598.50, Up $1.50.
  • Palladium, $772.80, Down $1.80.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 7 p.m. (CDT)! Or call us Fridays until 5 p.m. (CDT)! 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.

European Central Bank announced inflation pressure relief could suggest further easing measures

Gold rose today after European Central Bank (ECB) Policymaker Jens Weidmann announced inflation pressure relief could suggest further easing measures. Standard Bank Analyst Walter de Wet said, “It may be that the comments of Jens Weidmann made the market move … if we manage to push the market convincingly through $1,592, we may see a push towards $1,600 and until the New York market opens we should stay around current levels.”

The U.S. job market is slowly but surely picking up, JPMorgan Chase Senior Economist James Glassman confirmed, saying, “We’ve got a long way to go to get back to a fully employed economy, but we are on the road.” He continued to say, “If you look at the labor market data, you can’t find any evidence of this political debate that is going on, the fiscal cliff, all that.” The U.S. Labor Department reported today in the 12 months ending in January, the economy produced a net 2 million jobs, with an estimated 52 million hires and 50 million separations.

At 1:10 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,593.30, Up $13.30.
  • Silver, $29.23, Up $0.32.
  • Platinum, $1,597.50, Down $5.70.
  • Palladium, $773.10, Down $5.10.

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.

End of the week report: Spain, QE3 and Gold Prices

 

Gold Consolidates:

 

 

 

 

 

“After rapidly rising between mid-August and mid-September, Gold has since been consolidating,” BNP Paribas analyst Anne-Laure Tremblay said. “Short term, we could see a limited correction before the price resumes its ascent. The U.S. dollar has been strengthening of late, particularly against the euro. This is likely weighing on the Gold price. Beyond this, the Gold market is just taking a breather, as it is not far off the $1,800 an ounce level, which constitutes a strong resistance.” The break in price in Gold has not gone unnoticed by investors. Gold-backed funds increased by almost 300,000 ounces this week according to reports.  One piece of news that also gained attention this week is the amount of Gold that countries have been adding to their central banking systems. South Korea and Paraguay lead all other countries by adding more than 24 tons of Gold to their reserves in July alone. “Whether you’re looking at physical flows into ETFs or the options market, activity has clearly been on the bullish side, and that will see prices move higher as we go through the fourth quarter,” said Credit Suisse analyst Tom Kendall.

 

 

 

 

 

QE3 Questions?:

 

 

 

 

 

Not all members of the U.S. Federal Reserve appear to agree on the benefit or effectiveness of the recently announced new round of quantitative easing (QE3). Charles Plosser, President of the Federal Reserve Bank of Philadelphia, is concerned that not only will the new bond-buying program not work, but that it might also call into question the credibility of the U.S. central bank. “We are unlikely to see much benefit to growth or to employment from further asset purchases,” said President Plosser. “Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility.” U.S. investors are buying U.S. Treasuries at a quicker pace than international investors for the first time since 2010. This has certainly contributed to the U.S. debt climbing above $16 trillion USD for the first time. U.S. Treasuries have become popular despite their record-low yields because many investors also share the concern that QE3 will not succeed in stimulating the economy and creating more jobs. International investors still own 50.4 percent of the U.S. Treasuries, but this is down from the 55.7 percent share owned in 2008.

 

 

 

 

 

 

 

 

 

 

 

Spanish Gamble?:

 

 

 

 

 

Spanish Prime Minister Mariano Rajoy seemed to be gambling with his country’s well-being. The latest speculation out of Spain was that Rajoy was delaying a bailout request because he believed that issues in Italy will worsen, making the bailout terms friendlier for Spain when it does finally request a bailout. Raphael Gallardo of Rothschild Asset Management said that Spain “would be in better company and would suffer less of a stigma if it was to ask for a rescue at the same time as Italy. Italy needs further austerity efforts so those are probably more reachable with the support of the European Union and the ECB.”  Protests on the streets of Spain intensified during the week as the country began to roll out economic reforms along with its new budget.  Prime Minister Mariano Rajoy said, “We know what we have to do, and since we know it, we’re doing it. We also know this entails a lot of sacrifices distributed… evenly throughout the Spanish society.” His words, and the measures he intends to enact, are not enough to soothe all dissenting voices. A member of parliament was quoted as saying, “On paper they can make it all add up, but it will be hard to make the budget credible given all the reasonable doubts on the deficit target. It will be really tough to make the markets buy it.”  An audit of Spanish banks was also expected to be completed this week. The eurozone’s third largest economy has seen much trouble lately, and has been hit hard by the housing crisis. Citizens of Madrid continue to protest the announced austerity measures , and one region of the country has 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.

 

 

 

 

 

 

 

 

 

 

 

 

Enhanced by Zemanta

Greece and Spain hurt euro, drive down metals prices

 

Precious Metals are trading lower this morning, as central bank buying finally wasn’t enough to keep prices in positive territory.  Renewed concerns out of Greece and Spain have driven the euro downwards and strengthened the dollar.  However, analysts at Commerzbank noted, “Central banks are likely to continue to buy gold for the remainder of this year, thereby stripping supply from the market and contributing to climbing gold prices.”

Protesters have taken to the streets of Greece and Spain yet again.  The fresh Greek government is currently working on a budget with the European Central Bank, International Monetary Fund, and European Commission in order to receive more bailout funds.  The problem is that the Greek people have apparently reached a breaking point on austerity measures.  Author and economist Vicky Pryce said, “They are trying to see whether they can have a stay of execution, and the protests are actually probably going to help, because it’s obvious that they can’t take any more austerity.  The cost has been great for the Greeks … There’s just no light at the end of the tunnel at present.”

Spanish Prime Minister Mariano Rajoy seems to be gambling with his country’s well-being.  The latest speculation out of Spain is that Rajoy is delaying a bailout request because he believes that issues in Italy will worsen, making the bailout terms more friendly for Spain when it does finally request a bailout.  Raphael Gallardo of Rothschild Asset Management said that Spain “would be in better company and would suffer less stigma if it was to ask for a rescue at the same time as Italy.  Italy needs further austerity efforts so those are probably more reachable with the support of the European Union and the ECB.”

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

  • Gold, $1,747.90, Down $17.50.
  • Silver, $33.69, Down $0.27.
  • Platinum, $1,621.60, Down $11.20.
  • Palladium, $624.00, Down $16.80.

 

Enhanced by Zemanta

Overnight profit taking for the euro

 

International Monetary Fund's Managing Directo...

International Monetary Fund’s Managing Director Dominique Strauss-Kahn (L) talks with , European Central Bank President Jean-Claude Trichet (C) and Italy’s Governor Mario Draghi (R) prior to the start of their G-7 meeting at the Istanbul Congress Center (Photo credit: Wikipedia)

 

After a four month euro rally, Tuesday saw some profit-taking and the euro fell against the dollar. Spain’s seeming reluctance to seek a bailout isn’t sitting well with investors either. Derek Halpenny, head of FX research in London, said “If Spain steps forward (to ask for a bailout) and all of us get some clarity it would remove an element of uncertainty.” While in a television interview, Spain’s Deputy Prime Minister admitted they were still considering the conditions of a possible bailout.

 

The other side of the euro coin is that German investor confidence rose for the first time in five months. The rise is in response to the European Central Bank’s plan to buy government bonds. Holger Schmieding, chief economist at Berenberg Bank in London, said of ECB President Mario Draghi, “Draghi may have saved Germany.

 

Gold, which tracks closely to the euro, came off a recent six month high. Similar to the euro, it succumbed to overnight profit-taking. Without any new news today, it wouldn’t be surprising to see investors jump back in.

 

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

 

  • Gold, $1,764.60, Down $5.00.
  • Silver, $34.44, Up $0.06.
  • Platinum, $1,670.10, Down $3.50.
  • Palladium, $682.40, Down $6.70.

 

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.

 

Enhanced by Zemanta