Morning Gold & Silver Market Report – 8/7/2013
FED TALK DOMINATES, PRESSURES STOCKS, GOLD
The Gold price fell in overnight trading to a three week low as speculation abounds that the U.S. Federal Reserve will start to reduce bond purchases within the next few months. This is the much debated and much speculated topic of tapering. It is inevitable that the Fed will taper their bond buying as the economy is showing signs of improvement; the exact timing is what is unknown. Michael Lewis, head of commodities research at Deutsche Bank, said, “We expect the Fed will taper its asset program from September onwards.”
In continued mixed news, stock futures point to a lower start on Wall Street due to, once again, Federal Reserve tapering talk. Ava Trade chief market analyst Naeem Aslam said, “You may think that the tapering talk was already priced into the markets, but traders are certainly not convinced by this idea.” Not everyone agrees however, and many are using the Fed talk as a reason just to sell. Peter Cardillo, chief market economist at Rockwell Global Capital, offers his opinion, “The market has been going down for the past two days in slow volume. I think the market has already priced in tapering.” Regardless of your opinion, volatility abounds in an otherwise quiet trading period.
At 9 a.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,278.80, Down $3.70.
- Silver, $19.41, Down $0.21.
- Platinum, $1,425.80, Down $3.00.
- Palladium, $718.10, Down $6.20.
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