Morning Gold & Silver Market Report – 11/20/2012

PRECIOUS METALS FLAT; FOCUS ON MIDDLE EAST, FISCAL CLIFF

Precious Metals prices are flat this morning, echoing trends seen with the U.S. dollar. Yesterday, that trend saw Gold rally approximately $20 per ounce as the dollar was sent lower by hopes that leadership in the U.S. will be able to get a fiscal cliff deal in place before the end of the year. Andrey Kryuchenkov of VTB Capital said, “It is fair to say that the market remains bullion positive in the long run, but in the near term much depends on global risk sentiment and the U.S. dollar trade. At the same time, risk aversion is not extreme enough to trigger safe haven buying while inflation expectations remain anchored for now (though we expect this to change later into 2013).”

France has lost its AAA credit rating, and some economists are wondering now if the eurozone’s second largest economy is in jeopardy. France’s credit downgrade also comes with a negative outlook for the future by Moody’s Investors Service. Guillaume Menuet of Citigroup wrote, “Given persistent downside risks to economic activity, we continue to forecast a mild (gross domestic product) contraction of 0.2 percent in 2013, with the 3 percent of GDP budget deficit target likely to be missed.”

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

• Gold, $1,733.80, Down $2.60.
• Silver, $33.15, Down $0.10.
• Platinum, $1,582.00, Down $2.80.
• Palladium, $642.00, Down $4.30.

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