GOLD PRICE LOWER; ALL EYES ON BUDGET CUTS
Gold saw a price increase yesterday, which caused a small sell off, leading to the yellow metal experiencing a price dip today. However, between the United States Federal Reserve’s commitment to continue monetary easing and Congress failing to deal with the upcoming budget cuts, many economists believe Gold is in a position to move upwards again. “I think what's obvious is that from the testimony yesterday, that Bernanke has an unbridled enthusiasm for printing money,” Sica Wealth Management President Jeffrey Sica said. “There's not going to be any real serious negotiations on greater spending cuts any time soon, so this government is committed to debt and it's committed to printing money, and both those factors are very positive for Gold.”
The main talking point this week among economists continues to be the automatic budget cuts coming at the first of the month. While there has not been any progress made by the Capitol leaders, one fact is certain. If these cuts are allowed to take place, the effect on the economy will be considerable. Estimates show that the cuts could cause the loss of 750,000 jobs and cost 0.5 percent in economic growth. In his second day of testimony to Congress, Fed Chairman Ben Bernanke emphasized the impact the cuts would have on the economy. “Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant,” Bernanke told the House Financial Services Committee.
At 1:00 pm (EDT), the APMEX precious metals spot prices were:
- Gold, $1598.40, Down $18.60.
- Silver, $29.02, Down $0.32.
- Platinum, $1605.60, Down $11.90.
- Palladium, $744.90, Up $4.00.
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