Gold being pulled in both directions

 

Precious Metals prices recovered slightly after two economic reports were released this morning. United States housing starts and jobless claims were worse than expected. Economists expected housing starts to rise slightly, but they fell by 1.1 percent. Economists also expected a rise of about 1,000 in new jobless claims, but the real result was slightly higher at 2,000. These reports could give the Federal Reserve more ground for another round of quantitative easing (QE), about which some are expecting a decision later this month.

Physical demand for Gold is taking a hit in India now. That country has been the world’s largest consumer of Gold, in large part due to its high demand for use in jewelry. The two factors that are playing into the softening demand are an increase in import duties and a weak Indian rupee, which drives the local price of Gold higher. Combined with a stronger dollar and weaker euro, the rest of the world is seeing the Gold price hover around $1,600 per ounce. With currency trade on one end and the desire for a safe haven investment on the other, Gold seems to be tugged by both sides at the moment, waiting for a potential announcement on QE from either the United States Federal Reserve or the European Central Bank.

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

  • Gold, $1,608.30, Up $3.20.
  • Silver, $27.97, Up $0.05.
  • Platinum, $1,402.60, Up $5.40.
  • Palladium, $580.40, Up $0.90.

 

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Precious metals have deflated since Bernanke’s testimony earlier this week

 

Precious metals have deflated since Bernanke’s testimony earlier this week, but remain poised for the first overall weekly increase in about a month. Physical demand of gold is still hurt by India’s currency issues and a weakening ETF market as well. Analyst David Wilson’s remarked, “Given the collapse of the rupee, gold prices in India are still close to record highs, which is killing the jewelry market at the moment… Physical investor demand, when you look at ETFs, is not positive, so you would need speculative demand to be making up the difference, and it’s not. That’s related to the issue of growing skepticism over whether there will be U.S. QE.”

Meanwhile a Spanish bank bailout has been agreed to pending the actual bank audit to see just how bad the property loan situation actually is. Luxembourg’s finance minister Luc Frieden said, “We have formalized what we discussed in the past two Eurogroup meetings. We have formally approved the memorandum that lays out the conditions under which Spain can be lent money for the recapitalization of its banks… The approval of all 17 ministers is there, and that means that the program can continue. Money will not flow immediately, because work on the analysis of the specific banks is ongoing.” The audit is expected to be completed by mid-September.

Meanwhile concerns continue to mount over the correct response to the escalating violence in Syria following Russia and China’s veto of the U.N.’s proposal. The rumors swirling President Assad has agreed to give up power are being shot down. The clamor for military assistance is not there the same way it was in Libya either. The overall feeling is that “the regime is going through its last days,” according to rebel leaders.

At 9:00 a.m. (EDT) – the APMEX Precious Metals spot prices were:

  • Gold – $1,578.80 – Down $3.20.
  • Silver – $26.98 – Down $0.33.
  • Platinum – $1,411.40 – Down $11.70.
  • Palladium – $578.40 – Down $7.50.

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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European summit not looking good; dollar rising

Precious metals prices are weathering the blows of investors concerns over the eurozone debt crisis. The concerns ahead of the European Union summit, has influenced investors and even world markets. The rupee continues to struggle, which has curbed the primary gold-investing nation of India’s normal buying. Analyst Robin Bahr said, “There’s no semblance of a safe-haven at the moment but as the price goes lower that bid does come back as you maybe get some renewed investor interest – sovereign wealth funds and central banks looking to nibble away and even some physical buying.”

The concerns now are growing, as concerns over Germany’s own economic issues mount. As executive and consumer sentiment fell from 90.5 in May to 89.9, the lowest for Germany since late 2009 and unemployment is on the rise. The issue is that now core member nations, not just secondary nations, are affected by the growing debt crisis. Economist Christoph Weil said, “Germany won’t be able to disconnect from the euro-region developments… The second quarter will show an economic contraction and there are no signs of improvement for the following three months. Whether the situation stabilizes afterward hinges decisively on the euro crisis and latest developments are no real reason for optimism.”

The pressure continues to build for German Chancellor Angela Merkel within the European Union as she continues to be attacked on all sides from nations that find her intransigence off-putting. However, it is not just her partner nations, but she is even pressured globally. The issue is that as unpopular as her beliefs are in the EU, they are quite popular with the German people. Billionaire George Soros feels her position is a bit myopic. He said, “Merkel has realized that the euro is not working, but she cannot change the narrative she has created because that narrative has caught the imagination of the German public, and the German public has accepted it.”

At 9:00 a.m. (EDT) – the APMEX Precious Metals spot prices were:

  • Gold – $1,570.10 – Down $9.90.
  • Silver – $26.96 – Down $0.11.
  • Platinum – $1,402.30 – Down $9.50.
  • Palladium – $577.00 – Down $3.80.
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Gold coin sales from national Mints fall in Q1

Gold falls on deflation fears, euro debt worries (Reuters)

Gold coin sales from national Mints fall in Q1 (Reuters)

India’s Gold Demand May Revive on Normal Monsoon (WSJ)

Home Prices Showing Signs of a Turnaround: Case Shiller (CNBC)

Global stocks up, euro flat as technicals offset Spain worry (Reuters)

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Gold ticks slightly higher

Gold Ticks Higher Ahead of ECB, Fed Events (WSJ)

Gold eases, focus shifting to key economic events (Reuters)

Gold Being Sold Aggressively in India as Prices Near Record (Bloomberg)

Spain’s Bankia may get less aid than sought-sources (Reuters)

Dow Snaps Four-Day Losing Streak as Service-Sector Index Rises (WSJ)

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Monday links: Gold ends lower on European elections

Gold ends lower on European elections (MarketWatch)

India Removes Excise Tax on Gold Jewelry (WSJ)

Warren Who? Gold Bugs Still Think They Have Right Idea (CNBC)

US consumers upped their borrowing in March (AP)

A post-elections reality check in the Eurozone (LA Times)

US Stocks Mixed After Post-Election Bounce (WSJ)

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Weekly Gold & Silver Market Recap for April 27, 2012

 

Questionable Economy?:

Gold prices finished Friday by hitting a two-week high.  Over the past month, the yellow metal has been steady between $1,610 and 1,680 per oz. The climb in price is a direct result of the worse-than-expected American economic forecast. However, Gold remains in the same range as it has been for the month. Commerzbank analyst Carsten Fritsch said, “At the end of the year, we expect Gold to resume its uptrend, but not before that. We expect this range in trading to continue.”  The thought of further economic stimulus in the United States is frightening to some, but may be needed to ensure a boost to the financial system. Unsatisfactory jobless claims reported Friday morning pushed the Gold price up and the U.S.A. dollar down, as they usually have a negative correlation with one another. James Cordier at OptionSellers.com said, “The job market is softening, and the Federal Reserve may be forced to look at some form of easing. Investors have started pricing that in.” Previous rounds of quantitative easing have been bullish for Gold Continue reading