GOLD BOOSTED BY NEGATIVE ECONOMIC REPORTS
Gold and other Precious Metals benefited today following reports of a U.S. economic contraction in the fourth quarter of 2012. According to the first of three reports made public by the Commerce Department, gross domestic product fell by a 0.1 percent annual rate in the final quarter. This initial report is well below the forecasts that predicted roughly a 1 percent increase. The metals were already looking bullish “following yesterday’s technical bounce, but today’s reaction has nevertheless confirmed that investors still see Gold and Silver, above all, as safe haven assets,” said Fawad Razaqzada, technical analyst at GFT Markets.
The worse-than-expected economic news caused stocks to tumble from five-year highs today as investors now await the outcome of the Federal Reserve’s upcoming policy meeting. Today’s conclusion of the two-day Federal Open Market Committee meeting is expected to bring an announcement of reaffirmed commitment to the Fed’s bond buying program known as quantitative easing. Stimulus measures are expected to continue until a significant improvement in employment and economic data is realized. Further intervention by the Fed to print money to inject into the economy should cause analysts to anticipate dollar devaluation which is bullish for Gold in the long term.
At 1 p.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,680.50, Up $17.70.
- Silver, $32.17, Up $0.95.
- Platinum, $1,689.40, Up $10.50.
- Palladium, $752.50, Up $1.70.
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