Closing Gold & Silver Market Report – 1/26/2012

FED’S EASING CAUSES TURMOIL FOR BANK STOCKS  

Precious metals prices have remained steady after this morning’s gains, after gains in the past two days related to the Federal Reserve’s position on the U.S. economy. While the Fed holds interest rates down, it opens the door to more fluidity of cash and lower prices for other currencies, making Gold more desirable as a protective asset. Ross Norman, chief executive of Sharps Pixley, said he believes the Gold price might even double at its peak in the coming years.

Despite the positive knee-jerk reaction stocks had to the Fed’s announcement, U.S. stocks have fallen again as more negative news was released about the housing market. Banks were among the companies taking the largest hits. Bruce McCain, chief investment strategist who oversees more than $20 billion at the private banking unit of KeyCorp in Cleveland, Ohio, said, “It’s a little bit of cold water in the face. We’re in risk territory because we’ve come a long way in the market, and in terms of optimism on the economy. We need to work on that enthusiasm because it’s premature to think that we’ve solved all problems.”

One interesting side note that may have been overlooked amid all of the other news was that George Soros has bought $2 billion worth of MF Global Italian bonds and says he would buy even more. His reasoning behind the investment: deflation.

At 3:52 p.m. (CST), the APMEX precious metals spot prices were:

• Gold - $1,722.00 – Up $20.90.
• Silver - $33.52 – Up $0.33.
• Platinum - $1,612.30 – Up $31.70.
• Palladium - $693.50 – Down $0.90.