Mid-Day Gold & Silver Market Report – 2/28/2012

GOLD UP, OIL DOWN; FED CHAIRMAN TO SPEAK

Precious metals prices have been on the rise since the Morning Gold & Silver Market Report. This would seem to be a precursor to Federal Reserve Chairman Ben Bernanke’s upcoming semi-annual monetary policy report to the House of Representatives tomorrow and the Senate the following day. There is also an increase of revenue due to the release of 470 billion euros to European banks by the European Central Bank. These shifts have boosted the appeal of Gold in conjunction with a move to riskier assets. Bank of America Merrill said, “Gold has had a pretty good run” and the “liquidity injected by the ECB has been one driver.”

A key development has offset early worries over durable goods orders: The Conference Board’s consumer confidence index increased more than forecast. The rise in consumer confidence has led to an increase in stocks around the globe. However, not everyone is viewing this development as rosy as most investors have. HighTower’s VWG Wealth Management’s Managing Director Richard Weeks said, “The market climbs a wall of worry. … The market is perhaps looking for an excuse to take a pause or maybe have a pullback, which would make sense after the rally that we’ve had. I don’t have rose-colored glasses on, but I think the path of least resistance is up. Short-term, all signs say that risks have been reduced.” In a commentary today, Pimco’s Bill Gross wrote, “An instant replay of these past few decades would have shown that accelerating asset prices weren’t due to any particular wisdom on the part of academia or the investment community, but an offensively minded Federal Reserve and their global counterparts who were printing money, lowering yields and bringing forward a false sense of monetary wealth that was dependent on perpetual motion.”

At noon (CST), the APMEX precious metals spot prices were:

• Gold - $1,787.80 – Up $13.90.
• Silver - $37.20 – Up $1.62.
• Platinum - $1,727.30 – Up $12.00.
• Palladium - $721.90 – Up $15.40.