Mid-Day Gold & Silver Market Report – 10/10/2012

GOLD SEEN AS SAFE HAVEN; ENGLAND COMMENTS ON EUROPE

The headlines have been dominated by the struggles of the global economy and the uncertainty of investment options. However, Gold has shown to be a steady option recently. “Gold (is one of the most liquid ways) to get exposure to inflation. The volatility… will remain low going forward as the ugly head of inflation will emerge, and we will see a steady increase in gold demand,” said Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston. With questions regarding the United States’ economic future and the global economic slowdown, many investors are left looking for a solid investment.

In Europe, the news is focused on the European Union and the future of the euro. One of Europe’s biggest economic power houses, England, has kept its distance from the turmoil. Today the country is acknowledging that there are changes that cannot be ignored. “We are conscious that big changes are happening in Europe, there is a major crisis in the eurozone and this is likely to lead to changes in the relationship between countries in the eurozone and countries out of the eurozone,” Britain’s foreign minister William Hague said today.

In the United States, it was thought when the Federal Reserve announced another round of monetary easing the U.S. dollar would lose value. That has not happened to this point. The dollar index is actually higher than right before the Fed took action. This has many economists scratching their heads. “Defiantly ignoring the negative prognostications of the vast majority of currency strategists and commentators, the dollar has recorded a modest appreciation of 1.5% since the Fed announced unbounded QE four weeks ago,” said Michael Derks, chief strategist at FxPro in London.

At 1 pm (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1762.40, Down $2.10.
• Silver, $34.00, Up $0.02.
• Platinum, $1675.00, Down $17.30.
• Palladium, $651.20, Down $8.00.

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