QE3 decision coming at 12:30 P.M. EDT

 

Gold and Silver prices are mostly flat this morning as investors await a Federal Reserve monetary policy decision.  Fed Chairman Ben Bernanke is scheduled for a press conference at 2:15 p.m. (EDT), though the policy decision should be out closer to 12:30 p.m. (EDT).  David Morrison of GFT Markets believes that the markets have “priced in significant action from the (Fed).  The expectation is for a further round of large-scale asset purchases similar to 2010’s $600 billion QE2 program.” He continued, “The language accompanying another round of quantitative easing will be all-important” because if the Fed decides to wait, the markets could be in for disappointment.

Prices remained stable after the weekly jobless claims report was released.  Claims rose by 15,000 last week, about 12,000 more than expected.  Guy Berger of RBS Securities, Inc. said, “The labor market continues to be disappointing.  We’d like to see the hiring side pick up.  Companies are very cautious given all the uncertainty.”

One of the countries hit hardest by the eurozone debt crisis is Spain, which boasts the third-largest economy in the eurozone.  Spain’s prime minister Mariano Rajoy suggested to parliament yesterday that Spain may not need to ask for a bailout due to the success of the European Central Bank’s bond-buying program.  Many experts believe a bailout will be necessary eventually, however, and the delay in asking for one could prove to make things worse by way of conditions for receiving bailout funds.  Goldman Sachs analysts wrote, “The more the Spanish administration indulges domestic political interests and is perceived to be taking undue advantage of external support, the more explicit conditionality is likely to be demanded.”

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

  • Gold, $1,734.40, Up $1.70.
  • Silver, $33.21, Down $0.09.
  • Platinum, $1,661.40, Up $10.80.
  • Palladium, $684.60, Up $5.30.

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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The Gold price experienced little movement today, settling just above $1,600 for most of the day.

 

The Gold price experienced little movement today, settling just above $1,600 for most of the day.  The yellow metal was heavily talked about once word broke that long-time gold bull John Paulson has confidence that the precious metal is a long-term currency and inflation hedge. This reassured investors that gold’s price has the opportunity to raise regardless of its performance the past two quarters.

The American economy is showing improvement with positive data in retail sales, the unemployment report and the trade deficit all reflecting stronger numbers.  With this progress, Jan Hatzius at Goldman Sachs is predicting if the Federal Reserve pushes further stimulus measures like quantitative easing (QE3), it will not be in September.  Hatzius wrote in a note to clients, “We believe that continued weakness is necessary to prompt a substantial easing move. And so far, that weakness is not showing up in the data.”  Many economists are under the impression that the Federal Reserve Chairman Ben Bernanke will indicate the central banks next move at the Fed’s summer recoil in Jackson Hole, Wyo. on August 31.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,603.90, Up $2.90.
  • Silver, $27.89, Up $0.02.
  • Platinum, $1,397.00, Down $3.10.
  • Palladium, $576.80, Down $3.10.

 

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Precious Metals prices are down overall this morning

Precious Metals prices are down overall this morning, with gold and silver hovering around one percent lower.  Markets are still reacting to yesterday’s testimony to the U.S.A. Senate Banking Committee by Federal Reserve Chairman Ben Bernanke, who did not give a clear sign that another round of quantitative easing was likely.  David Lennox of Fat Prophets said, “The market was living in hope that he might say a little more than he did.”  The closest Bernanke came to saying anything of note on the topic was that the Fed is “looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market.”

Though there is no official word that more easing will happen, Goldman Sachs said in a recent report that there is a strong possibility it could happen later this year.  Goldman Sachs economist Andrew Tilton said, “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deteriorating in the already-cautions near-term Fed economic outlook.”

American stock futures are down as well this morning.  Bernanke is scheduled to continue his testimony today, though consensus is that it will draw less interest from the markets.  Housing starts rose to the highest level since October 2008, though the news wasn’t enough to turn around the loss in stock futures.

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

  • Gold – $1,571.60 – Down $19.40.
  • Silver – $27.07 – Down $0.33.
  • Platinum – $1,407.50 – Down $13.20.
  • Palladium – $579.00 – Down $5.40.

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 Seeks Direction Amid Global Economic Woes

As the week comes to a close, two things stand out in the marketplace. First are the unexpected positive job reports in the United States. These reports have given life to the dollar and taken the steam out of Gold’s two week rally. Second, negative economic news continues to flow out of Europe and China. Both have cut key interest rates, and that could be a good sign for Gold’s global outlook. “While the ECB cut was near term bearish for Gold, as it weakened the euro, it may be more bullish longer term. Added global liquidity, with policy easing measures from the eurozone, China and the Bank of England, may stimulate demand for hard assets, including Gold,” HSBC financial services wrote in a note.

The United States has been improving steadily in many key economic factors. Employment reports have shown fewer Americans without work. The housing market has turned a corner and is making up lost ground. The issue is with the pace of the improvement. Even with the unemployment numbers dropping, it is such an insignificant amount that the overall percentage remained unchanged. “Growth has been low, and there remains uncertainty about the economy and policy here and abroad. All of those things are weighing on activity, but overall I’d put it on low growth in the U.S.,” said economist Andrew Tilton of Goldman Sachs.

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

  • Gold, $1633.89, Down $21.48.
  • Silver, $28.02, Down $0.48.
  • Platinum, $1490.96, Down $25.89.
  • Palladium, $595.25, Down $7.71.
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Gold waits on summit, euro in survival mode

The Gold market continues its holding pattern on the eve of the European summit. The yellow metal started the day on an upswing and has now settled down as investors await news from Europe. Matt Zeman, head trader with Kingsview Finance in Chicago summed it up by stating, “There‘s no clear-cut direction (for Gold), everybody is waiting for the EU summit. You probably are seeing some positioning ahead of that.”

All eyes are focused on the European summit tomorrow, which will address the main topics of economic reform and recovery. The problem may not lie in the numbers; it may be in the leadership’s ability to work together. “The euro crisis is in some ways mind-bogglingly simple to solve … because it isn’t economics, its politics,” Jim O’Neill, chairman of Goldman Sachs Asset Management commented. “If Angela Merkel and her colleagues stood there together with the rest of the euro area … and if they behaved as a true union this crisis would be finished this weekend,” he added.

In the United States there is still major concern surrounding the future of the economy however, there are signs that point toward the positive. The durable goods report for May came out, and the numbers have improved for the first time in three months. The increase in durable goods is seen as an indicator that businesses have faith in the U.S.A. economy even with a lowered employment forecast and the struggles in Europe.

At 1:00 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1576.80, Up $0.40
  • Silver, $26.98, Down $0.18
  • Platinum, $1412.80, Down $16.00
  • Palladium, $581.00, Down $13.70
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The reactions to the Spain bailout are pessimistic

Goldman Sachs Group Inc. is forecasting a 23 percent return in a year for industrial metals with gold as one of their top picks. Jeffrey Currie, head of commodities research said, “Although the macroeconomic backdrop still remains uncertain, particularly in Europe, we believe that the selloff in commodity prices is likely overdone and the price risks are shifting more to the upside.”

Spain is now the fourth eurozone member to receive a bailout in the past three years when the debt crisis began in Europe. There is fear in the air that this bailout will put the nation in a deeper hole causing them to need assistance as well. Christian Reicherter at DZ Bank AG said, “This bailout doesn’t solve the euro-region debt crisis. There is skepticism about whether the money is enough for the banks and whether the nation might also need help, and this will keep Spanish bonds under pressure.”

The market is reacting to the Greek elections that are approaching with the U.S.A. stock market falling today. Investors are remaining cautious with the possibility of the Federal Reserve announcing another round of quantitative easing. Andrew Fitzpatrick at Hinsdale Associates said, “It’s a market that is looking to the next thing. It’s a market that is looking to the next thing. It could be Greece, and it could be further economic data. It’s a market waiting for possible Fed or European bank easing.”

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,597.60, Up $6.20.
  • Silver, $28.61, Up $0.05.
  • Platinum, $1,445.70, Up $18.60.
  • Palladium, $622.00, Up $10.00.
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Precious metals are down 1%-2% this morning

Precious metals are down 1%-2% this morning as investors await news from an informal summit meeting in the eurozone.  David Morrison of GFT Markets said, “Although this is litle more than a taxpayer-funded dinner for Eurocrats ahead of the main summit in June, any further signs of a rift between Germany and France will see the euro and equities fall further.”  Lately, as the euro has moved, so have precious metals.

Germany and France are far from the only topic of note in the eurozone.  The main focus at the moment seems to be the potential exit of Greece from the group.  Jim O’Neill, chairman at Goldman Sachs Asset Management said, “The markets are putting together a higher probability for the end-game in the eurozone…” in reaction to high demand for Germany’s two-year, no-interest bonds being sold at the lowest yield ever.  Speaking on the ramifications of Greece leaving the bloc, he said, “Once one exits, it breaks the notion that it’s a true currency union and that is a big moment.”

Oil markets, which have historically held a positive correlation to gold, have been uneasy in the midst of sanctions placed on Iran and other happenings in the Middle East.  A meeting between Iran and six world powers, including the U.S.A., is taking place to continue to attempt to convince Iran to scale back its nuclear program.  Iran has made it clear that it will not be intimidated, however, Russia’s foreign minister believes that the impression is that Iran is “ready to seek agreement on concrete actions.”

At 9 a.m. (EDT), the APMEX precious metals spot prices were:

  • Gold – $1,563.10 – Down $15.10.
  • Silver – $27.87 – Down $0.40.
  • Platinum – $1,433.00 – Down $27.40.
  • Palladium – $609.50 – Down $8.00.