Morning Gold & Silver Market Report – 3/01/2013

IS GOLD’S BULL RUN OVER? SEQUESTER DEADLINE TODAY

Gold bugs and novices alike are looking at the recent five month decline in the Gold price, wondering if the historic decade-long bull run is finally over. While there is no crystal ball to read the future, we can look at factors contributing to the more than 10 years of bullish prices. Some of these factors, such as central bank monetary policy, currency fluctuations, asset relocation and geopolitical unrest have been mostly constant in how they affect the demand for gold. Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider, said, “…the bullish drivers of Gold haven’t changed at all for several years.” She goes on to say that the Gold bull run isn’t over, it just isn’t in a hurry to get where it’s going. One of Gold’s strengths is its inverse correlation to the U.S. dollar; as the dollar has been showing some strength lately, investors have been more confident in their riskier investments and have moved some of their monies back into equities.

The U.S. government has one last option today to prevent the sequestration that will take effect over the next seven months. President Barack Obama and Congressional leaders will meet today at 10 a.m. (EST) to discuss ways to avoid the across-the-board spending cuts. Congress can stop the cuts at any time after they start if and when the parties agree to a deal. In lieu of a deal, cutbacks will take effect tomorrow. The International Monetary Fund warns that the cutbacks could have a total impact of knocking 0.5 percent off the U.S. economic growth this year as well as slow the global economy.

At 9:00 a.m. (EST), the APMEX Precious Metals spot prices were:

• Gold, $1,585.20, Up $5.10.
• Silver, $28.70, Up $0.24.
• Platinum, $1,582.80, Down $2.70.
• Palladium, $720.90, Down $12.70.

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