Morning Gold & Silver Market Report – 1/12/2012
U.S. GAINS KEY SUPPORT ON IRAN; JOBLESS CLAIMS RISE
Precious metals prices rebounded in overnight trading and were headed for an interesting opening bell. Italy and Spain’s bond sales were very good, as was the decision to maintain lower lending rates. LGT Capital Management analyst Bayram Dincer said, “The Bank of England and European Central Bank decisions will likely benefit Gold prices.” Physical Gold is in high demand as India gears up for its wedding season. An interesting fact from the U.S. Mint: Gold coin sales have been pretty brisk, as 82,500 ounces have been produced this month. That number already is 26% higher than the entire month of December!
Support from the Japanese government to impose economic sanctions against Iran for its nuclear development program is viewed as a key step, as Japan is one of the top-three buyers of Iranian oil. The other top Iranian oil buyers, China and Russia, have declined to support sanctions. U.S. Treasury Secretary Timothy Geithner was in Japan and was thankful for the Japanese support. President Barack Obama announced that the U.S. would freeze out financial institutions that deal with Iran’s central bank. These sanctions have accounted for a 20% drop in the rial to the U.S. dollar. Geithner told reporters, “We are exploring ways to cut Iran's central bank off from the global financial system. We are in the early stages of consulting with Japan and our other allies.”
However, estimated retail sales figures for December were not quite to the levels anticipated, and a reported increase in jobless claims defied expectations. Stock index futures are already shedding some gains. Tim Quinlan, an economist at Wells Fargo (which correctly forecast the 0.1% increase in jobless claims), said, “Consumers pulled out all the stops to have a decent holiday season, but we’re seeing the momentum from that dropping off. … We suspect the rate of consumer spending will slow.”
At 8:03 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,657.30 – Up $16.60.
- Silver - $30.43 – Up $0.47.
- Platinum - $1,499.00 – Up $2.30.
- Palladium - $645.00 – Down $1.70.