Mid-Day Gold & Silver Market Report – 10/4/2011
BERNANKE SPEAKS BEFORE CONGRESS, PRECIOUS METALS DROP
Since the Morning Gold & Silver Market Report, Federal Reserve Chairman Ben Bernanke spoke to Congress, making a number of points. Recently, when Bernanke talks, markets and precious metals have moved one way or another, and true to form, that held up this morning. The main issue leading to the drop in prices was the intended support from the Fed to help allay economic recovery concerns. “The recovery from the crisis has been much less robust than we had hoped,” Bernanke said.
The overall economic recovery is “close to faltering” according to Bernanke. The issues that we, as a country, have been facing continue to be issues that can stall the economic recovery. Unemployment, lack of confidence and the European debt crisis are the key contributing components. "The (Fed's policy-setting Open Market) Committee will continue to closely monitor economic developments and is prepared to take further action as appropriate to promote a stronger economic recovery in the context of price stability," Bernanke told the Joint Economic Committee of Congress.” This news and support from the Fed led to an increase in stocks, and gold showed its negative correlation to the stock markets by falling.
The uncertainty surrounding Greek debt repayment is again at the forefront. European Finance Ministers are putting banks more on the hook, in terms of potential losses they could incur and have postponed the next tranche payment for Greece until mid-November. Greek officials believe they will hit their target schedule until that time and officials are trying to curb the default talk. "If they are having problems getting the sixth tranche of funding, what's going to happen to the seventh tranche of funding in three months' time? The situation is going to be even worse then. So Greece is on the brink," said Nick Stamenkovic, Bond Strategist at RIA Capital Markets.
At 12:00 PM (CT) the APMEX precious metals spot prices were:
- Gold - $1,625.80 – Down $33.90.
- Silver - $30.07 – Down $0.78.
- Platinum - $1,473.20 – Down $43.90.
- Palladium - $564.00 – Down $31.80.