Morning Gold & Silver Market Report – 3/14/2012
GOLD, SILVER DIP ON ECONOMIC OPTIMISM
Gold and Silver prices were plunging as a result of new optimism for the economic recovery in the U.S. and around the world. Tuesday, Federal Reserve Chairman Ben Bernanke diminished the likelihood of QE3. Bernanke continued his position that the economy was recovering, although slower than many might like, but still quickly enough not to require further stimulus now. If a third round of quantitative easing is needed, the Fed will be ready to implement, but there are no plans to do so. There are Fed watchers who still expect the Fed to take action in the second quarter to give the economy a boost before budget cutting begins in 2013.
The optimism for economic recovery was further stimulated by results of banking stress tests reported Tuesday. Most of the largest banks passed their tests, with the exception of Citigroup, the nation’s third-largest bank. Most analysts said the Fed had failed enough banks (four) to give the test creditability, while at the same time assuring the banking system is sound. Others are not so sure. On CNBC on Wednesday, Peter Elston of Aberdeen Asset Management said, “I think a lot of banks are still overstating their assets, and they have not recognized problem loans to the extent that they should have done, and it is very difficult to trust numbers.”
A 6.1-magnitude earthquake struck just east of Tokyo, Japan, on Wednesday. No tsunami warnings had been issued for that temblor, and no damage reports had been issued from any nuclear plants. It has been just over a year since Japan was hit by a magnitude 9 quake, the strongest in that nation’s history.
At 8 a.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,646.90 – Down $48.70.
- Silver - $33.00 - Down $0.62.
- Platinum - $1,687.40 - Down $15.40.
- Palladium - $700.90 – Down $8.00.