Closing Gold & Silver Market Report – 7/16/2013
GOLD PRICE MAINTAINS; BERNANKE’S BALANCING ACT
The Gold price continued to rise throughout the day, showing strength with the stabilization of U.S. inflation pressures. This leveling out suggested that if the U.S. Federal Reserve tapers its bond buying program, it would happen later in the year as opposed to immediately. Investors continue to focus on Federal Reserve Chairman Ben Bernanke’s comments at this week’s semi-annual Congressional testimony for signs of what is to come. Today’s gains come on the heels of the U.S. Labor Department’s release of the Consumer Price Index (CPI), which increased 0.5 percent, the largest increase since February. Carlos Perez-Santalla at brokerage Marex Spectron said, "The CPI figure is lower than what the Fed wants, so the Gold market sees this as tapering is further away." The Gold price is still down more than 20 percent this year but gained five percent last week.
Investors from all sectors will be looking for clues from Bernanke on Wednesday and Thursday of this week. Pimco's Mohamed El-Erian said, "[Bernanke] is going to try to do a high-wire act without the excitement. He's just going to try to convey he's data-dependent, he's flexible, he's adaptable, and he's going to try to not rock the boat." The last time Bernanke rocked the boat, on May 22, the stock market suffered for it. El-Erian goes on to explain that the Fed wants to taper for a couple of reasons. They have an optimistic view of the economy and they are worried about the costs and risks, or collateral damage and unintended consequences, of the program.
At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,293.40, Up $6.90.
- Silver, $20.06, Up $0.14.
- Platinum, $1,423.50, Up $2.10.
- Palladium, $737.00, Up $3.80.
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