Gold and equities markets down again on world growth outlook

 

Trepidation continues to weigh on investors as the U.S. stock market opened to early losses this morning. A meager outlook for global growth and reduced earnings are the catalysts for market dips in recent days. “We have had a number of large companies reporting poor visibilities and that is going to continue,” said Michael O’Sullivan, head of portfolio strategy at Credit Suisse Private Banking in London. “Revenue growth is simply weak because the U.S. economy has slowed, the Asian economy has slowed and Europe is in recession.”

Gold is down this morning as negative forecasts for global economic expansion weigh on Precious Metals markets as well. Though Gold has realized three straight sessions of losses, the metal rallied to 11 month highs in the third quarter peaking at $1,795 an ounce. Long term investors are still seeking the security presented by the yellow metal as uncertainty remains pervasive in equities markets. “The long-running rally is intact, however, and we expect that Gold prices will revive after a period of consolidation,” said analysts at HSBC bank.

At 9 am (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1760.00, Down $2.50.
  • Silver, $33.92, Down $0.08.
  • Platinum, $1670.40, Down $21.90.
  • Palladium, $651.50, Up $7.70.

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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Stocks report mild gains in anticipation of QE3

 

U.S. stocks are reporting modest gains today as investors are guarded in anticipation of potential quantitative easing (QE3). Thursday will conclude a two day session of the Federal Open Market Committee (FOMC) after which many analysts foresee Federal Reserve Chairman Ben Bernanke potentially announcing further government stimulus. Economists are expecting the announcement following 43 consecutive months of unemployment above 8% and an economy that grew less than 2% in the second quarter of 2012. A poll of economists who put the chances of QE3 above 50% resulted in 39 out of 51 predicting action on the part of the Fed during this week. “Monetary stimulus will ‘shore up’ a fundamentally weak economy, as opposed to helping the U.S. economy attain a significantly faster underlying rate of growth,” said John Lonski, economist at Moody’s Investors Service.

Gold futures are also realizing humble gains as a German court ruling has allowed Berlin to ratify a final euro zone rescue fund along with news from the FOMC. “With the market’s main focus on this week’s [Fed] meeting…prices were buoyed by a stronger euro,” said strategists at HSBC. The next 24 hours could prove to be eventful for precious metals markets.

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

  • Gold, $1,732.30, Down $1.60.
  • Silver, $33.12, Down $0.46.
  • Platinum, $1,649.20, Up $41.20.
  • Palladium, $679.10, Up $4.30.

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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QE3 talk pushes Gold higher

 

Gold rose to a five-month high today on quantitative easing news out of the U.S. and Europe.  James Steel of HSBC said that “it’s the avalanche of money argument” in regards to Precious Metals’ gains recently.  Andrey Kryuchenkov of VTB Capital added, “All that promise (of quantitative easing) needs to turn into concrete action.  And for Gold in the long run, it needs any sort of liquidity boost, or balance sheet expansion, and for bond yields to stay low.”

Drakon Capital’s Guy Adami believes that the quantitative easing news will send Gold to a new record price.  “I don’t think it has anything to do with fear (about fiat currencies).  It has everything to do with what’s coming down the pipe,” he told CNBC.  “Again, I’ll say, although it’s painful on the down days, and there have been a number of them, I think gold is what’s going to win,” he added. “One day we’re all going to wake up, and the price of gold is going to be a lot higher than it is now. When I say a lot higher, I mean north of $2,000.”  Whether Gold eclipses this figure is yet to be seen, but Adami is a firm believer.

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

  • Gold, $1,696.70, Up $10.60.
  • Silver, $32.38, Up $0.94.
  • Platinum, $1,570.40, Up $32.10.
  • Palladium, $642.00, Up $12.60.

APMEX’s Account Managers now have extended hours Mondays through Fridays and are here to serve you until 8 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 Pushing Towards $1700 – Silvers Above $32

 

European Central Bank

European Central Bank (Photo credit: Travel Aficionado)

 

Comex gold futures are slightly higher this morning setting new five month highs. Gold and silver prices shot upwards after Fed Chairman Ben Bernanke seemed to open the door to QE3 in his speech last week from Jackson Hole. Now, markets are focused on the monthly meeting of the European Central Bank, which takes place on Thursday. Many analysts expect the ECB will announce a monetary stimulus plan that will boost both stocks and precious metals.

 

Adding more pressure to the ECB, Moody’s Investors Service changes its euro zone outlook to negative. Moody’s warns that if they cut the ratings of the European Union’s four biggest budget backers: Germany, France, the U.K. and Netherlands, they might just downgrade the entire bloc.

 

The U.S. and Europe may not be the only economies on the verge of receiving a stimulus. Although the Chinese government has yet to implement any stimulus measures in the face of a slowing Chinese economy, there is additional evidence that their economy is slowing. On Saturday, the official manufacturing-sector survey came out 49.2 in August. This falls below the level of 50 that separates expansion from contraction. In another survey more focused on small to mid-size business, published by HSBC, the number was 47.6.

 

At 9AM EDT the APMEX precious metal prices were:

 

  • Gold price – $1,691.70 – up $5.60
  • Silver price – $32.20 – up 76 cents
  • Platinum price – $1,558.10 – up $19.80
  • Palladium price – $640.80 – up $11.40

 

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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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HSBC predicts $1,900 Gold before 2013

 

Precious Metals gave up early gains after the better than expected nonfarm payrolls report was released this morning. The gain of 163,000 jobs in July blew past the expectations of 100,000. However, the unemployment rate moved up to 8.3 percent, the highest since February. American stock futures added to gains on the news.

The economies that make up the eurozone continue to drag. After barely avoiding a recession in the first quarter of the year, Ben May of Capital Economics said the future may not be so kind to that region. “If you look at the breakdown by country, it suggests that recession is going to be pretty broad based, and it’s not purely down to developments in the (eurozone) periphery,” May said.

Analysts at HSBC believe that the upcoming “fiscal cliff” for the United States and the rest of the economic uncertainty in the world will push the Gold price to $1,900 by the end of 2012. The analysts wrote, “Economic uncertainty, geopolitical tensions, and the uncertainty of the U.S. November elections are theoretically gold bullish. … Patience is the most important commodity.” Staleness in Gold’s price can be attributed to a give and take in the markets, according to the report. “Periods of heightened eurozone concerns have typically led to equity markets selloffs, triggering margin call related selling in Gold as investors seek to raise cash.”

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

  • Gold, $1,590.20, Up $1.90.
  • Silver, $27.23, Up $0.14.
  • Platinum, $1,392.20, Up $4.40.
  • Palladium, $575.50, Up $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.

 

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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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