‘SUPPORT REMAINS UNDER THE MARKET’ FOR GOLD
U.S. stock futures and Precious Metals have edged downward this morning as the dollar firmed. “The rise in Gold and Silver will be tempered by drops in the stock market and rises in the dollar, and if this continues then the upside is limited for the time being,” Marex Spectron said in a note. “However, support remains under the market…” VTB Capital said in its own note, “Judging by the broader commodity market, QE3 euphoria from last week is now over. Yet we… remain bullish in the long run, given the debasement of major fiat currencies as interest rates remain subdued, while liquidity boosts… will bring about inflation concerns.”
Disappointing news out of China has all eyes on the Philadelphia Federal Reserve Bank’s manufacturing report, due later this morning. Mike McCudden of Interactive Investor said, “After what was appearing to be some decent U.S.-led support on the back of solid housing data, Chinese manufacturing numbers have come in overnight and spoiled the party. Optimists may well be gambling on a turn in Chinese fortunes soon, but whatever they are up to behind the curtain isn’t working.”
With dissenting voices from certain branches of the Fed regarding QE3, many branch presidents are feeling the need to defend the decision. The latest is Boston Fed President Eric Rosengren, who said, “The actions taken by the Federal Reserve last week provide significant additional support to the economic recovery. They should result in stronger economic growth, and return us to full employment more quickly than would be the case absent the policy.” Many investors, and even some Fed policymakers, are particularly concerned with the fact that this round has no end date in sight.
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,766.60, Down $4.10.
- Silver, $34.53, Down $0.07.
- Platinum, $1,621.90, Down $19.50.
- Palladium, $664.00, Down $9.10.
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