Morning Gold & Silver Market Report – 9/26/2011

Gold Prices Slide to $1,532 Overnight, But Have Since Rebounded Sharply – As investors continue to sell gold to cover other losses, the price of gold fell as low as $1,532 per oz overnight, but has climbed nearly $100 since then. “Gold is one of the few assets that remain in positive territory this year, in a sense it is one of the last assets standing, and because of this as investors head for cash they sell the assets that have performed,” Edel Tully, a London- based analyst at UBS AG, wrote today in a report. “While gold’s retracement was not really a surprise, the depth of its plunge certainly was.”

Silver prices fell as much as 16 percent to an overnight low of $26.07. It has since rebounded above $28, but it has raised the gold to silver ratio up to 58:1; when for most of 2011 it had been in the 40:1 range. The CME Group Inc increased the margin requirements for both gold and silver as metal prices dropped below existing requirements two days in a row. This action is expected to steady prices by removing some of the speculators from the market.

All eyes will continue to be on Europe this week. The U.S. stock market is set for a positive triple digit opening on hopes the European political leaders are coming close to an actionable decision that alleviate this mounting crisis. Not all economists are that optimistic. Silvio Peruzzo of the Royal Bank of Scotland said on CNBC this morning, "The euro zone will enter a recession by the fourth quarter of this year with contractions in growth for this quarter and the first quarter of next year, which in the current environment could be very damaging."

At 8AM (CT) the APMEX precious metal prices were:

· Gold Price - $1,631.00 – down $8.80

· Silver price - $28.21 – down $1.31

· Platinum price - $1,571.70 – down $44.50

· Palladium price - $640.10 - down $3.40