Gold pulled on both sides; eurozone disappoints again

U.S. stock futures are trading higher this morning, while the Gold price is relatively flat again. The yellow metal’s price continues to be pulled in different directions due to the looming fiscal cliff dilemma. On one hand, investors see Gold as a safe haven, and the uncertainty facing the U.S. in the coming months has those investors concerned. On the other hand, there could be a “liquidity-driven risk event,” according to Daniel Brebner of Deutsche Bank, which would cause investors to cash out of Gold to hold the U.S. dollar.

Disappointing news in the eurozone continues, as a report showed that factory output in the region fell by the most since January 2009. Germany, normally a strong point for factory output, fell by a substantial amount. Expectations that the eurozone will see another recession (the second in three years) are rampant, and this report only makes it worse.

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

  • Gold, $1,729.80, Up $3.00.
  • Silver, $32.64, Up $0.09.
  • Platinum, $1,585.20, Down $1.40.
  • Palladium, $644.00, Up $6.40.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EST)! Or call us Fridays until 6 p.m. (EST)! 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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GDP Report Boosts Dollar; Greece in More Trouble

Gold and Silver are trading flat as the U.S. dollar is being fueled by an improving GDP number released this morning. The U.S. economy grew 2.0 percent in the third quarter, thanks to improving home building and higher spending. This is the final report regarding economic growth before the presidential election next month, and was eagerly awaited by investors.

More trouble in the eurozone is helping the dollar’s rise. One eurozone official stated, “It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of primary budget surplus, a return to economic growth, and privatization.” Reports out of the region say that Greece will need even more aid, this time to the tune of about $39 billion.

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

  • Gold, $1,713.30, Down $0.20.
  • Silver, $32.13, Up $0.03.
  • Platinum, $1,559.00, Down $7.30.
  • Palladium, $604.00, Down $1.50.

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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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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Gold moves with the dollar. Unrest in Syria persists

 

While a strong U.S. dollar continues to put pressure on gold prices, many investors are showing confidence in gold after it fared well during yesterday’s sell off. “Gold is just moving with the U.S. dollar,” MKS Finance head of trading Afshin Nabavi said. “Yesterday, below the $1,570 level, we saw some light physical related interest come in. Today it has been very quiet.” The euro/dollar exchange rate has been a primary driver in day to day movement in gold.

Global unrest adds to the cloud of global economic uncertainty. The Syrian conflict continues to be a source of concern as rebel troops and forces of embattled President Bashar al-Assad continue to clash. US concerns were increased as Damascus has admitted it has, and is willing to use chemical and biological arms in the event of what it calls foreign intervention. U.S. President Barack Obama said the world would hold Assad and his entourage accountable “should they make the tragic mistake of using those (chemical) weapons

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

  • Gold, $1,576.40, Down $2.50.
  • Silver, $26.85, Down $0.28.
  • Platinum, $1,386.80, Down $12.10.
  • Palladium, $562.90, Down $9.10.

APMEX’s Account Managers now have extended hours and are here to serve you until 7 p.m. (CDT) Mondays through Thursdays! If you have any questions about investing in precious metals or would simply prefer to place your order by telephone, we are here to help

 

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Gold Climbs over $75 from Morning Lows

Gold prices slipped below $1550 in early morning trading before closing today over $1625. The U.S. jobs report sank stocks across the globe, while gold once again became a safe haven for nervous investors. Gold was up 4% on the day, but up over $75 from morning lows. It had actually begun the day in negative territory.

Is it possible that the weak job growth in the USA will threaten the world economy? When you add this to what is going on in Europe and the Chinese factory production going into neutral, there is cause for concern. “It certainly suggests that perhaps the softness in Europe is either influencing the U.S. or that the U.S. recovery may not be strong enough to overcome the softness in Europe,” said Jack Ablin, Chief Investment Officers at Harris Private Bank in Chicago.

Gold and silver prices and been sinking in the past month because the U.S. Dollar has risen in relation to the European euro. Today’s jobs report could verify what many analysts have already indicated. The U.S. dollar is simply the least wilted rose in the vase. The US Treasuries are paying all time lows and the spread between 5 and 10 year notes is at all-time highs. There are many who feel that gold will become the safe haven status, and today’s rise is just a beginning.

Have a great weekend!

At 5PM EST the APMEX precious metal prices were:

  • Gold price – $1,627.10 up $63.40
  • Silver price – $28.75 up 91 cents
  • Platinum price – $1,447.60 up $28.00
  • Palladium price – $613.00 down 90 cents
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Spanish Fallout & Positive Housing Data

Gold has turned negative in midday trading as the fallout over downgraded Spanish ratings added strength to the U.S.A. dollar.  A strengthening dollar drives down the demand for dollar-denominated commodities, including gold.  “Gold has a swift and negative reaction to the U.S. dollar firming up in the middle of the trading session along with weaker oil prices,” said Jeff Wright at Global Hunter Securities. “All of this is in reaction to news of a downgrade by Egan-Jones in the credit rating of Spain; we view Spain as the best line of defense to save the euro zone and have already factored Greece defaulting on their debts and exiting the euro this summer.“

Also adding pressure to gold prices is the rising U.S.A. stock market.  The S&P 500 is up again on housing data.  “We’re definitely seeing signs of stabilization on the housing front,” said Brad Sorensen, at Charles Schwab Corp. “The economy is looking decent. There’s also a bit of relief that we won’t have any imminent kicking out or defaulting of Greece.” There also appears to be a shift from stock repurchase to business investment during April and May. “Investors and corporations themselves are best served when the cash is applied to improving capital investment, as opposed to buying stock back,” said Bruce Bittles of Robert W. Baird & Co.. “That would be much more bullish.”

At 1:00 p.m. (EDT) – the APMEX precious metals spot prices were:

  • Gold – $1,559.10 – Down $11.60.
  • Silver – $27.96 – Down $0.53.
  • Platinum – $1,432.00 –Up $3.50.
  • Palladium – $605.00 –Up $13.10.
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Weekly Gold and Silver Market Recap for May 25, 2012

by John Foster. Email John.

Golden Range?:

Concerns out of the Euro zone continued to pull down the euro and strengthen the American dollar this week, thus pulling down prices. Gold in particular has remained relatively fluid within a certain price range of $1,530 to $1,590. However a key price indicator in the short term continues to be $1,600 an ounce. However, euro pressure continues to be in the driver’s seat for prices. An unidentified international dealer said, “If we break above $1,600 and even go higher to confirm the bull trend, we will see more buying.”  Gold’s price drop has been well documented during the past few weeks. Many factors have led to the shift in price. However, in the view of many investors, this is an opportunity, based on a closer look at the numbers. CNBC contributor Dennis Gartman said, “The public is massively bearish, and that tells me it’s time to be bullish.” He added, “Most people don’t think Gold and stocks can go higher together, but I expect to see them trade dramatically higher over the course of the next several months. The trend is now higher.”  Prices of Precious Metals were boosted by news of purchases from the biggest of spenders. Central banks in Turkey, Ukraine, Mexico, and Kazakhstan increased their Gold holdings in April, according to the International Monetary Fund. Commerzbank AG said, “We regard the central banks as a stabilizing element on the Gold market and anticipate increasing buying of Gold.” Lachlan Shaw of Commonwealth Bank of Australia said that early signs of an American recovery, a slowdown in Chinese growth, question marks over United States monetary policy and a sovereign debt crisis brewing in Europe are all keeping the market in a wait and see mode. “Any of these four catalysts can drive prices and investment demand,” he said.

U.S Slow but Steady?:

The United States might experience slower economic growth than previously expected with the end of extended benefits for the unemployed. This might influence some job seekers to accept jobs they otherwise would prefer not to, or give up searching for a job and drop out of the labor force. Andrew Tilton at Goldman Sachs Group Inc. is optimistic about the end of the extended benefits program. He said, “There has been an improvement in the availability of jobs. In a better labor market, people losing their benefits would be more likely to look and to find a job, and less likely to simply drop out.  However, consumer sentiment in the United States rose to its highest point in more than four years in May. Optimism in the air as a healthier economy is beginning to develop. Richard Curtin, head of the University of Michigan’s consumer survey, reflected on how long the consumer sentiment will remain positive. He said, “The most likely prospect is that job growth resumes at a modest pace and that confidence remains largely unchanged until after the November election and decisions about tax policy are made.” Despite the upheaval in Europe, the United States’ economy continues to push forward. There is concern the debt problems in Europe and China could affect American factory data soon, with the Purchasing Managers Index slowing from 56.0 in April to 53.9 this month. Paul Edelstein said, “We are growing at moderate pace of two to two-and-a-quarter percent, but we have some headwinds that are starting to assert themselves, particularly coming from Europe.” Continue reading