Gold, Silver flat as Jackson Hole speech looms

Jackson Hole, WY

Jackson Hole, WY (Photo credit: mf.lane)

Gold and Silver prices are mostly flat this morning ahead of the Jackson Hole Economic Symposium to be held later this week.  Though European Central Bank President Mario Draghi has bowed out of the event, all eyes are still on the Federal Reserve and whether chairman Ben Bernanke will announce another round of quantitative easing.  Scott Anderson of Bank of the West said that the Fed has been “like a diver eyeing the pool from the edge of the diving board, but can’t seem to get themselves to move.”

The “will they or won’t they” game that the Fed has been playing in regards to quantitative easing has pushed and pulled the Gold price to highs not seen since Spring.  Many investors are expecting Bernanke to announce such a plan during his speech at Jackson Hole on Friday.  However, there is another Federal Open Market Committee meeting September 12-13 that may serve as the podium for the official announcement.  Danske Bank analyst Christen Tuxen said, “We think that we will see a fairly dovish Bernanke on Friday and that he will commit, if not at Jackson Hole then at the September FOMC meeting, to deliver more easing to the market.”

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

  • Gold, $1,667.10, Down $1.10.
  • Silver, $30.93, Down $0.04.
  • Platinum, $1,520.00, Down $1.40.
  • Palladium, $635.20, Down $6.00.

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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Gold slightly lower; market still analyzing FOMC minutes

 

American stock futures and Gold are slightly lower this morning as investors continue to analyze the latest Federal Open Market Committee minutes. The top story hasn’t changed; all eyes are firmly on a small town in Wyoming. “Given all the mixed messages, the Jackson Hole symposium next Friday is building up to be a key event as we look forward to the latest download from the chairman himself,” said James Reid of Deutsche Bank.

Yesterday, the St. Louis Federal Reserve president said that more easing may be unnecessary. Today, one of the longtime supporters of further quantitative easing by the Fed, Chicago Fed President Charles Evans, stated his view on the matter. “The outlook for growth is 2 percent, if we are lucky 2.5 percent, over the next 18 months to two years. Back in the spring, we thought it was going to be 2 1/2, 3 percent. … We stepped down our outlook; unemployment is 8.3 percent; there’s a lot of reason to do more,” he said.

Though the Gold price has come off the recent rally this morning, Pradeep Unni of Richcomm Global Services said that it likely won’t last long. “Having got the necessary signals from the Fed for QE3, the market is just waiting for a confirmation to spike higher,” he said. “Any consecutive release of weaker than expected economic data will only add fuel to the fire.”

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

  • Gold, $1,668.90, Down $2.40.
  • Silver, $30.58, Up $0.04.
  • Platinum, $1,542.00, Down $13.90.
  • Palladium, $644.80, Down $13.30.

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

 

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Jobless claims disappoint, leaving door open for QE3

 

English: James Bullard, president of the Feder...

English: James Bullard, president of the Federal Reserve Bank of St. Louis (Photo credit: Wikipedia)

 

Precious Metals prices added to early gains after the release of the weekly jobless claims report. After an upward revision from last week’s numbers, the report showed increases across the board in new claims, existing claims, and the four week moving average. Jumps in the prices of Gold and Silver are most likely due to the fact that yesterday’s Federal Open Market Committee (FOMC) meeting minutes revealed that a third round of quantitative easing (QE3) was likely unless there was significant improvement in economic reports, and this report certainly does not indicate improvement.

 

In stark contrast to the minutes of the FOMC meeting released yesterday, St. Louis Federal Reserve President James Bullard said, “If we were to resume, and I think we will, 2 percent growth, maybe a bit stronger than that in the second half of the year, unemployment ticks down through the rest of the year, that’s not a great outcome but that’s a good enough outcome to keep us on hold,” regarding QE3. Bullard also said the market may be setting itself up for disappointment. He said, “Probably the best thing to talk about here is what would that action really be? I think the markets have the idea of some gigantic action. I’m not sure if the data really warrants that.”

 

The euro continues to rise against the dollar, which is supporting the Gold price’s recent moves. Chen Min of Jinrui Futures in China said, “The Fed’s tone is totally different in the minutes from previous comments, and that helped Gold break from the previous range and move into a higher price range ahead of the peak consumption season.”

 

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

 

  • Gold, $1,664.20, Up $24.90.
  • Silver, $30.50, Up $0.83.
  • Platinum, $1,543.80, Up $16.30.
  • Palladium, $637.90, Up $7.70.

 

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Investors waiting for QE3

 

The stock market is down today as American investors paused following six straight weeks of gains on the Dow Jones Industrial Average. Also, European officials exposed a supposed plan to cap European bond yields, which hindered investor confidence even as the European Central Bank insists that no decision on the matter has been made.

The dollar is trading down against the euro today. Economists and investors alike are awaiting any possible hints that the United States will embark on a third round of quantitative easing (QE3) from the minutes of the latest meeting of the Federal Open Market Committee (FOMC), set to be released Wednesday. Modestly positive data from the recent FOMC meeting point to delaying QE3. Bill Stone, chief investment strategist at PNC Asset Management Group, said, “Even though the minutes are going to reflect they are leaving the door open, the odds have fallen since then because we’ve seen improvement in some of the data.” However, Bruce Bittles, chief investment strategist at Baird, believes newfound investor confidence is potentially risky. He said, “Investor sentiment has turned more optimistic in recent weeks. This could be problematic, given that sentiment is approaching extreme optimism at a time when the seasonal headwinds begin to surface.” Investors will wait to see if these seasonal headwinds will effect Precious Metals as the traditionally slow summer months come to an end.

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

  • Gold, $1,621.60, Up $3.70.
  • Silver, $28.68, Up $0.57.
  • Platinum, $1,498.70, Up $24.60.
  • Palladium, $608.60, Up $2.00.

 

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HSBC Predicts Gold to Rally above $1900 in 2012

 

In a report just released from HSBC Bank, “Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically gold-bullish, and gold should perform better later in the year when U.S. growth is poor and the dollar is weak.” The report further stated that “We expect prices to rally to above $1,900/oz by the end of the year. Patience is the most important commodity.”

Gold is up slightly in early morning trading as the U.S. dollar index hit a one month low. The positive jobs report on Friday increased the appetite for risk and therefore put downward pressure on the U.S. dollar. There is much speculation that during the September Federal Open Market Committee further monetary easing will be announced. For now, gold remains in a fairly tight trading pattern while trying to decipher the direction of the global economies.

Spain is staying in the spotlight and the question is being asked of how much bailout they will actually need. At the moment, efforts are being made to stop the bleeding, but it is uncertain whether or not they will save the patient. The credit ratings make it very difficult for institutional investors to invest in Spain. There are concerns that this could turn into the same pattern as Greece, where smaller bailouts eventually turned into a full-fledged bailout.

At 9AM EDT the APMEX precious metals prices were:

  • Gold price – $1,1610.00  – up $2.70
  • Silver price – $27.80 – down 11 cents
  • Platinum price – $1,397.00 – down $17.40
  • Palladium price – $577.60 – down $1.60

 

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