Morning Gold & Silver Market Report, 7/12/2012

GOOD JOBLESS REPORT NOT ENOUGH TO OVERCOME FED DISAPPOINTMENT  

The disappointment from the minutes of the recent Federal Open Market Committee meeting is overshadowing fresh economic news this morning, sending stock futures and Gold down. Weekly jobless claims are at their lowest level in four years, but that wasn’t enough to turn around the markets. Instead, as Jim Reid of Deutsche Bank explains, “The minutes showed that further (quantitative easing) is not yet a consensus view among FOMC members and would only likely be triggered if the economic recovery were to lose momentum.” Investors are clearly disappointed at this revelation.

Hedge fund manager Eric Sprott recently said, “I just can’t imagine the demand for Gold is going down. I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.”  Sprott believes that Gold will see a new record high by the end of the year, which equates to a 22 percent increase.

A new deposit rate in the European Union began overnight, and it had an immediate effect. The move to a zero rate for deposits is unprecedented, and the hope among EU leaders is that it will lead to more interbank lending, which hopefully will lead to a reinvigorated economy. European Central Bank Governing Council member Josef Bonnici said it “provides an incentive for the banking system to look at what alternatives there are to improve their earnings.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,562.30, Down $15.00.
• Silver, $26.71, Down $0.39.
• Platinum, $1,411.30, Down $20.30.
• Palladium, $575.00, Down $9.00.

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