Mid-Day Gold & Silver Market Report – 1/15/2013

BUNDESBANK WANTS GOLD RESERVES TO STAY AT HOME

Gold piggybacked off both yesterday’s gains and the dramatic rise in Platinum price to pull within striking distance of its critical support level of $1,700 per ounce. Germany’s central bank, Bundesbank, plans to keep its Gold holdings in close proximity as opposed to securing it in foreign banks as it has done in the past. Gold investors carefully watch the net purchase of Gold by central banks. The rise in Gold acquisition by sovereign governments has proven to be a buying trigger for private investors in recent years. The Bundesbank announcement comes after a lengthy history of public demand for an audit of German Gold reserves. “People have gotten a sense of how bad things could become and Gold is the ultimate means of payment. The euro won’t last forever, [and] Gold, for various reasons, is the anchor,” Chief Economist at Precious Metals firm Degussa Thorsten Polleit said.

While Gold climbs, U.S. stocks have dropped again today as concern mounts over debt ceiling negotiations. “The debt-ceiling concern means more uncertainty in play,” Tom Wirth, senior investment officer for Chemung Canal Trust Co, said. “Obama can’t say he won’t negotiate because he has no choice. He’s not Congress. It’s not good for the economy to have a government shutdown.” Amid pervasive economic uncertainty, data from Tuesday shows that consumer spending for December rose firmly for the third straight month. However, higher taxes beginning this month could signal a slow-down in retail buying. A significant reduction in consumer spending could bring down markets and increase the appetite for safe-haven investments like Gold and Silver.

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

• Gold, $1,685.70, Up $14.30.
• Silver, $31.45, Up $0.31.
• Platinum, $1,687.90, Up $29.70.
• Palladium, $713.20, Up $8.90.