Mid-Day Gold & Silver Market Report 3/30/2012

CONSUMER CONFIDENCE UP, BUT QE3 STILL POSSIBLE  

The Gold price continues to hold steady thanks to a stronger euro after finance ministers came to an agreement to increase Europe’s firewall to an estimated 800 billion euros. Anticipation is building among Gold investors who believe negative U.S. data might be forthcoming in the second quarter, which might lead to a third round of quantitative easing by the Federal Reserve. “A shift in focus from the negatives in the eurozone to the negatives in the U.S. may influence Gold prices in the medium term,” HSBC analysts said in a note.

Economists’ predictions that economic growth has slowed may be inaccurate as U.S. consumer confidence in March reached its highest level in more than a year. “So long as the consumer is spending, that’s the biggie everyone is watching as they drive the economy. The economy is on a decent trajectory, but maybe not as strong as some would like,” said Wayne Kaufman at John Thomas Financial in New York.

India, the world’s largest importer of Gold, is experiencing many complications with its economy, including a depreciating currency, slowing growth and a weak government. “One of the primary drivers of the current account deficit has been the growth of almost 50 percent in imports of Gold and other precious metals in the first three quarters of this year (2011-2012),” India’s finance minister Pranab Mukherjee said earlier this month. India is facing a massive trade deficit of 70 percent, with expectations the deficit could be above $65 billion for the 2011-12 fiscal year. 

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

• Gold – $1,668.30 – Up $13.90.
• Silver - $32.47 – Up $0.43.
• Platinum - $1,638.50 – Up $11.00.
• Palladium - $655.30 – Up $9.70.

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