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.