Closing Gold & Silver Market Report – 10/13/11
GOLD CAUGHT BETWEEN SAFE HAVEN AND COMMODITY; FITCH IS AT IT AGAIN
Precious metals have recovered slightly since the mid-day report, as stocks ended the day weaker after the earlier release of worse-than-expected economic data from China. Gold seems to be caught in an interesting situation, according to Forbes. It’s a situation where a historical safe-haven asset is also grouped together with commodities, which tend to be more on the risky side of investing. The author, Agustino Fontevecchia, explains that the metal is up about 20% this year, even after the rapid drop seen in September that most investors saw as an excellent buying opportunity. He continues to say that most analysts remain bullish on the metal.
The U.S. trade deficit (the negative difference between what we’re exporting and what we’re importing) remained steady in a report released early this morning. However, after removing inflation, it does show an increase in that gap, up to $47 billion. The trade deficit with China widened to a record $29 billion in August, possibly providing new fuel to the threatened “currency war” between the two economic powers. The third-quarter gross domestic product growth is still expected to come in higher than the sluggish 1.3% it grew in the second quarter, possibly lending some relief to investors looking for life in the recovery from recession.
Fitch Ratings is in the news again after placing a number of American and European banks on review for possible downgrades. In the U.S., the banks in question are Bank of America, Morgan Stanley, and Goldman Sachs. In a statement, the credit ratings agency said, “These institutions’ business models are particularly sensitive to the increased challenges the financial markets are facing. These challenges result from both economic developments, particularly in the euro area, as well as a myriad of regulatory changes.”
At 4:00 pm (CT) the APMEX precious metals spot prices were:
- Gold - $1,671.40 – Down $13.20.
- Silver - $31.93 – Down $0.90.
- Platinum - $1,538.30 – Down $16.10.
- Palladium - $598.10 – Down $14.90.