Morning Gold & Silver Market Report – 7/26/2013
WEAKER U.S. DOLLAR; GOLD RIDING THREE WEEKS OF GAINS
A drop in the value of the U.S. dollar has had a ripple effect that extended beyond Wall Street’s equities market, triggering a sharp drop in Japan stocks overnight. Investors are looking ahead to next week’s data and the Federal Reserve meeting. Keith McCullough, chief executive officer at Hedgeye Risk Management, said, “Dollar down was bad for Japan (off three percent) and it’s bad for U.S. equities. The Russell closed at another all-time high yesterday too, so some of this is just called a correction.” The week is set to end on a flat note for Wall Street with the major indexes either ending slightly lower or with minimal gains. Steen Jakobsen, chief economist with Saxo Bank, said, “People are realizing growth is subpar and consensus is subpar too.”
The Gold price retreated overnight, but is still on course for its third week of gains. The fact that the U.S. dollar weakened against the basket of major currencies has helped to keep Gold on even footing. The Precious Metal is supporting a more than eight percent gain over three weeks. International demand, especially from China, the world’s second largest consumer of Gold, has helped to support the Gold price even as thousands of tons Gold have exited ETFs. In fact, China’s demand could hit a record high this year. It’s no surprise either. Danny Laidler, head of ETF Securities' Australia and New Zealand business, said, “The fundamentals for buying Gold are still there - loose monetary policy, concerns over the Middle East and Europe, and (economic) data from the U.S. and China not being as positive as expected.”
At 9:09 a.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,325.90, Down $5.90.
- Silver, $20.02, Down $0.22.
- Platinum, $1,429.30, Down $18.60.
- Palladium, $733.00, Down $8.80.
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