Mid-Day Gold & Silver Market Report, 9/6/2012
POSITIVE DATA FROM U.S. AND NEWS FROM ECB MOVE STOCKS/GOLD PRICES HIGHER
U.S. stocks are up today following positive economic reports and news about the European Central Bank’s (ECB) unlimited bond-buying program. Information showing growth in the U.S. services sector – as well as in employment and exports – coincided with the ECB’s announcement, and this has driven the S&P 500 above its highest point since 2008. According to Mario Draghi, President of the ECB, the new bond-buying plan, “…will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro.”
The gold price benefited as a result of the latest news from the Eurozone, rising above $1,700 an ounce to reach its highest level in six months. "Gold is holding because the market has been given what it was hoping for, but in order for gold to move decisively higher from here, we need to see what numbers the U.S. will bring to the table," Ole Hansen, senior manager at Saxo Bank, said. Hansen’s remark is in reference to anticipation of the U.S. Federal Reserve’s announcement on whether or not they will seek their own bond-buying plan to help stimulate a lagging U.S. economy. A third round of quantitative easing (QE) could cause an additional boost to gold prices, as QE has been one of the main factors in doubling the price of gold since 2008.
At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,704.80, Up $11.80.
- Silver, $32.69, Up $0.36.
- Platinum, $1,587.00, Up $10.40.
- Palladium, $647.50, Down $0.60.
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