Mid-Day Gold & Silver Market Report – 11/28/2012

GOLD HITS TWO WEEK LOW; U.S. FEDERAL RESERVE PROCEDURE REVIEW

Gold and other Precious Metals prices are seeing a significant dip in price today. The price of Gold has fallen two percent today, which is the largest drop in three weeks. The Gold price dropped twenty dollars in a five minute span this morning due to a large sell-off of the Precious Metal. Over two million ounces of Gold futures were traded in that short time frame. “Clearly if a trader was looking to take profit on his positions then one would finesse metal into the market slowly - so not profit-taking going on here. More likely this could be a short play, with the seller looking to trigger stops below the market and thus extend the move lower significantly. If so, he certainly caught the market on the hop as the move is counter-intuitive with everything else that is going on in the economy.” Sharps Pixley chief executive Ross Norman said.

Earlier in the week the European finance ministers agreed on a plan to help debt ridden Greece work towards financial stability. While the main point of the plan was to push back the deadline of reaching the country’s financial goals. Another point that has not gotten as much press is the talk of simply forgiving some of Greece’s debt completely. German Finance Minister Wolfgang Schaeuble hinted at the idea in a news conference yesterday. “When Greece has achieved, or is set to achieve, a primary surplus and fulfilled all of its conditions, we will, if need be, consider further measures for the reduction of the total debt,” he said.

In the United States the Federal Reserve has continued to keep their financial easing program in place indefinitely. The main key to the easing program is the level of interest being charged on loans. It has been kept around zero percent and there has been no indication of when that will change. Charles Evans, president of the Chicago Fed gave his opinion this week. He believes the interest rate should remain low until the U.S. unemployment rate improves to at least 6.5 percent. It is unusual for any member of the Fed to give specifics on guidelines for policy changes. However, the idea of doing so is gaining support. Janet Yellen, second in command to Chairman Ben Bernanke on the Federal Reserve Board, recently said, “I support this approach because it would enable the public to immediately adjust its expectations concerning the timing of liftoff in response to new information affecting the economic outlook.” While this is just opinion, time will tell if this could lead to new procedures at the Fed.

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1722.40, Down $21.90.
• Silver, $33.81, Down $0.26.
• Platinum, $1614.80, Down $4.70.
• Palladium, $674.10, Up $5.00.

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