Mid-Day Gold & Silver Market Report – 1/11/2012
GOLD TOPS SURVEY AS 2012’S PREFERRED ASSET
Gold is continuing to rally for a second day along with a strengthening euro. Historically, Gold’s price has a negative correlation to the U.S. dollar, but Societe Generale predicts this trend may change going forward. Societe Generale said, “While the dollar may not see a significant correction soon and is likely to continue to gain against the euro as the eurozone crisis persists, the negative effects of a stronger dollar on Gold are likely to be largely diminished in 2012, allowing the bullish macro drivers (such as monetary easing and geopolitical tension) to dictate price action once again.” A poll of 164 investors conducted by Nomura showed that 19.5% of them prefer to buy Gold and hold onto it until the end of the year. The poll compared Gold, bonds and stocks as investment choices.
The minutes from the U.S. Federal Reserve meeting in December have been released. The Fed’s modifications to its communication approach are drawing favorable reviews. The Fed will provide updates four times a year on its plans for short-term interest rates. This gives investors, businesses, and consumers reassurance that interest rates will not increase sporadically, observers said. Michael Murphy at Rosecliff Capital said, “The potential for increased transparency is a positive. It will give the markets more access to the thought process of the FOMC (Federal Open Market Committee). It could definitely wreak havoc if they are not clear on what they are trying to accomplish.” The first such update will be released after the Federal Reserve’s meeting Jan. 24-25.
At noon (CST), the APMEX precious metals spot prices were:
- Gold - $1,643.00 – Up $10.50.
- Silver - $30.02 – Up $0.12.
- Platinum - $1,495.30 – Up $31.70.
- Palladium - $647.00 – Up $10.80.