Mid-Day Gold & Silver Market Report - 5/11/2012
GOOD NEWS FOR GOLD; PIMCO CALLS FOR QE3
Good news for Gold prices surfaced when a survey conducted by Bloomberg showed that 14 of 32 analysts anticipate prices to gain next week. The Gold price is currently being affected by the political uproar in Europe, which is pushing the euro down, and positive American economic news, which is strengthening the dollar. “When the market gets very nervous, then they buy dollars, and Gold finds it difficult to rally,” said Jesper Dannesboe, an analyst at Societe Generale SA in London. “Given what’s going on in the markets at the moment, any rally will probably just be a bounce before another setback.”
The prediction is that when the Federal Reserve meets again in June, there will be an announcement about further monetary easing. Bill Gross, who runs PIMCO’s Total Return Fund, wrote Thursday on Twitter, “A decision to buy more debt is getting closer.” Gross was referring to the Federal Reserve possibly purchasing additional bonds to counter a sluggish United States economy. Jan Hatzius at Goldman Sachs Group Inc. said, “In such an uncertain environment, taking out a bit more insurance still looks like the sensible choice for American monetary policy-makers. We have stuck with our forecast of some additional monetary easing,” referring to the Fed’s policy meeting June 19 and 20.
China’s economy appears to show an unexpected slowdown in output data for April, with lower retail sales and easing prices. Both industrial output and fixed asset investment growth fell below their lowest points in some time. Alistair Thornton, an economist with IHS Global Insight in Beijing, believes a structured plan should be developed to promote growth for the economy. Thornton said, “The government has attempted to revive the economy through largely passive means, but that strategy appears to be failing. A more assertive monetary policy is now needed.”
At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold - $1,588.00 – Down $9.00.
- Silver - $29.08 – Down $0.16.
- Platinum - $1,475.90 – Down $18.90.
- Palladium - $603.80 – Down $12.60.
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