Central banks jump back on the Gold train

Prices of Precious Metals were boosted this morning 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.

The weekly jobless claims report boosted the American dollar’s appeal. The report showed no movement in the number of claims, remaining at last week’s level of 370,000. American stock futures added to gains after the news.

Weakness in China’s economy and continued struggles in the eurozone appear to be forcing the Chinese government’s hand, as economists and strategists are predicting aggressive stimulus in that country. Dariusz Kowalczyk of Credit Agricole said, “The focus of the stimulus is likely to be on the fiscal side … because this is the fastest way to boost aggregate demand.” Economic stimulus around the world has been positive for Gold and Silver prices in the past.

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

  • Gold, $1,577.20, Up $27.20.
  • Silver, $28.54, Up $0.94.
  • Platinum, $1,434.30, Up $18.20.
  • Palladium, $601.70, Up $8.60.
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