Mid-Day Gold & Silver Market Report – 8/25/2011
STOCKS SLUMP; GOLD IN THE BLACK AGAIN
Gold has turned the corner into positive territory after stocks tumbled thanks to the jobless claims report. Also, as expected, most investors are focused on Federal Reserve Chairman Ben Bernanke’s speech tomorrow morning, and nervousness is returning to the markets. “Clearly there has been a liquidation of excessive long positions,” says Bill O’Neill of Logic Advisors. He added that the mentality of the markets is “shoot first and ask questions later … But if you really look at the fundamental factors driving uncertainty and fears, it’s all still there. All it takes is some rumor, some little rumbling,” and investors are flocking back to gold.
There is a lot of speculation as to what Bernanke will say at the annual Jackson Hole, Wyoming meeting tomorrow, specifically regarding a third round of quantitative easing. Regarding gold prices, some are speculating that regardless of whether QE3 is announced, it could be favorable. The stock market is looking for a boost from QE3, however more dollars in the economy means it may take more of those dollars to buy gold. If QE3 is shot down, the stock market could take a hit, and the asset with a high negative correlation to stocks (gold) could benefit.
The situation in Libya seems to be clearing up, as rebels are now on the hunt for the all-but-ousted president, Muammar Gaddafi. The rebels are in full control of Gaddafi’s compound, and are seeking a way to end fighting without any more bloodshed, though they haven’t been too successful at that to this point.
At 12:30 pm (CT) the APMEX precious metals spot prices were:
- Gold - $1,762.60 – Up $3.30.
- Silver - $40.92 – Up $1.65.
- Platinum - $1,822.00 – Down $5.30.
- Palladium - $755.50 – Up $10.30.