Morning Gold & Silver Market Report, 8/27/2012

GOLD MIGHT SEE BEST YEAR SINCE 2010  

A Bloomberg report this morning stated the prospect that Gold might rise to $1,800 per ounce by year’s end, which could extend Gold’s gains for the year to more than 15 percent. This would be the greatest gain since 2010, when Gold saw a 30 percent increase. The expectation of higher Gold prices continues to be driven by speculation that many world governments including the United States and China will enact measures to stimulate their economies, which will increase Gold prices as an inflation hedge.

Although there are many who do not expect any major announcements by Federal Reserve Chairman Ben Bernanke at this week’s meeting in Jackson Hole, Wyo., one top Fed official is speaking out in favor of more stimulus. Chicago Federal Reserve Bank President Charles Evans told reporters that the Fed needs to launch QE3 immediately and keep buying bonds until the jobless rate goes down. “I don’t think we should be in a mode where we are waiting to see what the next few data releases bring,” Evans told the Hong Kong Bankers Club. “We are well past the threshold for additional action; we should take that action now.”

German Chancellor Angela Merkel has asked officials in her coalition to “weigh their words” when they call for a Greece exit from the euro. Merkel said such words are very damaging at a time negotiations are in a critical phase. It is clearly her intent to keep the euro intact. She also pointed out that Greece Prime Minister Antonis Samaras is taking very serious steps to reduce debt. September is seen as a critical month for European leaders as they continue to try and get a grip on this three year old crisis.

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

• Gold, $1,670.40, Down $1.00.
• Silver, $31.01, Up $0.30.
• Platinum, $1,546.80, Down $8.60.
• Palladium, $651.30, Down $2.40.

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