Mid-Day Gold & Silver Market Report – 12/16/2011

GOLD PRICE MOVING TOWARD $1,600      

Gold is seeing a steady recovery as the day continues after having been dealt a sharp blow in price earlier in the week. Much of Gold’s movement is inverse to the movement of the U.S. dollar, which is backing off some gain from earlier this week. It is not uncommon to see physical Gold investors move into the market at a time such as this. Robin Bhar, an analyst at Credit Agricole, said Gold “has proved resilient before, with the help of physical/central bank/investor buying.”  According to the World Gold Council, demand for gold in 2011’s third quarter rose by 33% year on year to 468.1 tons. Central bank purchases were nearly one-third of that total tonnage.

Stocks in general had been feeling the positive effects of U.S. government data showing inflation pressure waning, while jobless claims fell to a 3 1/2 year low last week.  This gives rise to the hope that the Fed could do more to boost the economy. Additionally, closer to home, U.S. lawmakers reached a deal Thursday to fund a variety of government agencies through Sept. 30 and thereby avoid a shutdown of many governmental operations. There has been no secret that President Obama and the Congress are at odds on many issues, so reaching a tentative deal to keep many government operations from shutting down is a win.

At noon (CST), the APMEX precious metals spot prices were:

• Gold - $1,595.30 – Up $18.10.
• Silver - $29.50 – Up $0.21.
• Platinum - $1,417.20 – Up $9.20.
• Palladium - $627.70 – Up $6.10.