Morning Gold & Silver Market Report, 9/6/2012

ECB TO BUY SOVEREIGN BONDS  

“The euro is irreversible,” said Mario Draghi, European Central Bank president, as he announced a bond buying program at a news conference in Frankfurt. The program is called MOT, or Monetary Outright Transactions. MOT will focus on the secondary sovereign bond market, where Draghi said it is necessary to deal with “severe” distortions in those bond markets.

Ahead of the meeting, Precious Metals prices were up across the board. Most notably, the Gold price was again higher than the $1,700 mark. The euro has gained against the dollar due to Draghi’s remarks that he would do “whatever it takes” within the ECB’s mandate to save the euro. It will take time to see if the MOT program is considered “whatever it takes” and keeps the euro going. Gold has a strong inverse correlation to the American dollar, and as we have seen the euro rally, we have also watched Gold rally with it. Gold is at a five month high.

Closer to home, today’s jobless report showed jobless claims decreasing. Estimates are that claims decreased by 12,000. Although this isn’t a monumental improvement, it is a step in the right direction, and any positive movement is welcomed.

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

• Gold, $1,702.00, Up $9.40.
• Silver, $32.64, Up $0.32.
• Platinum, $1,581.00, Up $4.40.
• Palladium, $645.00, Down $2.00.

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