Closing Gold & Silver Market Report – 3/5/2012

GOLD PRICE CLOSES ABOVE $1,700; STOCKS FALL ON CHINA, U.S. NEWS  

Since the Mid-Day Gold & Silver Market Report, the price of Gold climbed to end the day above $1,700. Markets across the board have been weighed down by depressing data released in the U.S., as well as from China and Europe. The Gold price fell sharply last week in response to testimony by Federal Reserve Chairman Ben Bernanke before Congress, in which he did not give indications that the Fed was considering another round of quantitative easing. However, in a note to clients, analysts with Commerzbank stated that although there is “additional scope for correction” in precious metals prices, such correction would likely be temporary. Many analysts and economists have predicted that Gold is on track to reach prices above $1,800 before summer.

Stocks in the U.S. dropped today, responding to news out of China that it had lowered its economic growth target, as well as to news in the U.S. that there was a decrease in orders to factories (the first such decrease in three months). After advancing for three weeks straight, the S&P 500 index fell 0.4 percent. The Dow Jones Industrial Average and the Nasdaq saw similar declines. Responding to the drop in stocks, David Joy, a chief market strategist with Ameriprise Financial Inc., said, “It’s wise to take a little money off the table. Some of the easy gains have already been made. We’re back to focusing on the economic fundamentals. China saying that they are targeting 7.5 percent growth raises concern of a hard landing.” Another analyst pointed to a decline in the Citigroup Economic Surprise Index for the U.S. as a cause for concern in the market.

A selection of charts taken from Pricedingold.com provides an entertaining look at what the prices would be in Gold for some everyday goods and services. Included among the charts, the value of the U.S. dollar when priced in Gold (with the dollar showing a significant decline over the past few decades), home prices compared to the Gold price, and the U.S. Gross Domestic Product represented in grams of Gold. Some more whimsical charts show the cost for first-class postage priced in Gold, the price of coffee in milligrams of Gold per pound, and the price for a pound of uranium in grams of Gold.

At 4 p.m. (CST), the APMEX precious metals spot prices were:

• Gold - $1,707.20 – Down $3.10.
• Silver - $34.04 - Down $0.50.
• Platinum - $1,666.40 - Down $26.30.
• Palladium - $706.00 - Down $6.50.