Morning Gold & Silver Market Report – 9/14/2011
FRENCH BANKS DOWNGRADED; FED PREPARES TO DO THE ‘TWIST’
Precious metals were mostly down throughout overnight trading, while stock futures were down before turning higher earlier this morning. The Producer Price Index and retail sales numbers were released at 7:30 am (CT), and showed virtually no change from July’s numbers. Even though this was in line with expectations, stock futures have given up recent gains, while precious metals pared losses. The PPI is seen as a good indicator of inflation. While food prices rose, fuel prices dropped, giving us a flat result overall.
After a recent review, Moody’s Investors Service downgraded the credit ratings of two prominent French banks, Societe Generale and Credit Agricole. Word that the banks were under review for downgrade has been part of the reason European stocks have been tumbling of late. Bank of France Governor Christian Noyer believes that the markets have already priced-in this downgrade, and does not expect it to have any further effect on bank stocks.
The Federal Reserve will reportedly discuss “Operation Twist” at their meeting next week. This is a plan to shift weight in the Fed’s balance sheet more towards long-term securities as opposed to short-term debt. Michelle Meyer, an economist for Bank of America Merrill Lynch, said, “That sends a signal the Fed is still active in supporting growth.” The Fed is keeping a close eye on the debt situation in Europe as well as problems in the U.S., such as the troubling 9.1% unemployment rate.
At 8:00 am (CT) the APMEX precious metals spot prices were:
- Gold - $1,830.70 – Down $1.40.
- Silver - $41.04 – Down $0.23.
- Platinum - $1,822.00 – Up $7.50.
- Palladium - $724.00 – Down $4.50.