Closing Gold & Silver Market Report, 8/1/2012

FED HOLDS STEADY; PRECIOUS METALS PRICES DIP     

Precious Metals prices took a blow today as the United States Federal Reserve decided against any action to stimulate the economy at this time. The Federal Reserve is only one part of the monetary puzzle, so to speak, as the European Central Bank and the Bank of England are set to meet Thursday, which will give observers a better idea of what actions will be taken in the global marketplace to ease the fears. Monetary easing has been known to boost the price of Gold, as the value of currencies depreciates when easing occurs.

The Federal Reserve stopped short of any stimulus announcement but did acknowledge the economic recovery is sputtering. Although no new measures of easing were announced, there was a decidedly different tone from its previous proclamation in June that it was “prepared to take further action as appropriate.” In its statement, the Fed said, “The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed.” There are a number of considerations being made to help boost the economy, including the Bank of England’s recent “funding for lending” proposal to increase lending to private citizens and corporations. Thursday’s European Central Bank meeting is being seen as a clear indicator of market activity. Strategist Jim Russell said, “The big fireworks will be tomorrow. Anything short of (aggressive ECB action) will represent a disappointment to capital markets.”

At 5:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,600.60, Down $11.60.
• Silver, $27.46, Down $0.55.
• Platinum, $1,398.00, Down $18.90.
• Palladium, $582.00, Down $9.50.

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