Gold price awaits FED action; Goldman Sachs predicts rise

Precious metals have extended their decline this morning, and Bill Greiner of Mariner Wealth Advisers explains that it has much to do with the Federal Reserve.  “It’s highly possible that we’ll see gold and commodities in general continue to drift down until the Fed steps in with some sort of quantitative easing package.”  In the past, gold and other precious metals have greatly benefited from quantitative easing.  Goldman Sachs’ commodity research team write that the Fed is likely to start another round of easing in June.

Likewise, Hussein Allidina of Morgan Stanley wrote that the European Central Bank will be forced to print money to attempt to alleviate some pressure of the eurozone debt crisis.  Morgan Stanley predicts an average price for gold of $1,825 this year and $2,175 in 2013.  With prices well below those targets, they are predicting that gold will spend a portion of the year well above those prices to balance it out.

U.S. stock futures are up slightly after housing reports showed that new homes are being built at a quicker pace than expected.  March’s numbers were revised sharply upwards, and April’s numbers still showed improvement.  However, permits for new construction, seen as a gauge of future demand, are down.

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

  • Gold – $1,541.10 – Down $17.50.
  • Silver – $27.50 – Down $0.66.
  • Platinum – $1,430.10 – Down $17.40.
  • Palladium – $596.00 – Down $6.10.
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Wednesday Links: Goldman Sachs Report Says Buy Gold

Precious Metals

Gold Traders Struggle to Recognize the Fed’s Tune (WSJ)

Bernanke Sells The Gold Standard Short (SeekingAlpha)

Goldman Sachs: Buy Gold!  (WSJ)

Precious Metals Recap: Gold Fails to Break $1,700 (Fox Business)

Gold #1 Favored Investment Acording to CNBC Survey (CNBC)

Gold prices moved below $1,660 an ounce today, as profit-taking was accelerated late in the session by a COMEX options expiration. (APMEX)

Markets

Stocks slide on economic jitters (CNN)

Stocks follow oil lower on reserve talks (Reuters)

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