Closing Gold & Silver Market Report – 8/24/2011
GOLD FALLS AS TRADERS CASH OUT, TAKE RISKIER BETS
Gold fell substantially today as traders moved into riskier markets, like stocks, in anticipation of the announcement of a third round of quantitative easing.
Glenn Hubbard, dean and Russell L. Carson professor of finance and economics at Columbia Business School, and former chairman of the Council of Economic Advisors doesn’t believe QE3 will actually happen. “The affect of a QE3 would be relatively modest, and it might risk raising inflationary expectations, so I doubt it." Inflationary pressures could push gold upwards, and if QE3 does happen, gold could benefit as traders feel less comfortable holding cash positions that are being continually diluted by an aggressive move by the Fed to print more money.
However, it looks like many investors are expecting some kind of QE3 announcement on Friday, as the market is already seeing prices set up in anticipation. If Bernanke makes no mention of a new stimulus program in his announcement then markets could be in for a surprise, which could increase volatility and possibly push gold higher.
At 4:15AM (CT) the APMEX precious metal prices were:
- Gold price - $1,756.00 - down $107.30
- Silver price - $39.81 – down $2.59.
- Platinum price - $1,807.50 – down $73.60.
- Palladium price - $747.50 – down $18.80