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Morning Gold & Silver Market Report – 8/25/2011

Gold Prices Continue to Move Down Overnight, then Stabilize in Early Morning Trading

Gold price headed towards $1,700 in overnight trading, but is strengthening in early morning trading, now sitting above $1,730. Platinum prices were below $1,800, but have bounced back over $1,810. Silver and palladium have rallied from negative territory and currently sit positive. One year ago, as investors anxiously awaited Ben Bernanke’s Jackson Hole speech, gold prices were at $950 per ounce. Many analysts had predicted a pullback in gold prices due to its rapid climb, but most categorize this as a correction because the same factors that drove investors to safe havens are still in play long term.

The weekly jobless claim just came out this morning and once again the economists are wrong. They had expected a decline of 3,000, but instead saw an increase of 5,000 to 417,000. This surprise is attributed to the strike by Verizon workers, but it begs the question didn’t the economists realize Verizon workers were on strike? The Labor department does reassure us that this is still nowhere close to a level that would indicate a recession. Stock futures had been rising, but have pulled back on the jobless claims report.

The CME raised maintenance margins for trading COMEX 100 oz gold futures by 27%. Even though margin is going up 27%, here is how it breaks down: 30 days ago when gold was around $1,600 the margin represented 3.4% of contract value. Now, with gold in the $1,730 range, this represents 4% of contract value. There has been an increase, but perhaps not as significant as the 27% would indicate.

At 8AM (CT) the APMEX precious metal prices were:

  • Gold price - $1,739.80 – down $19.50
  • Silver price - $39.89 – up 62 cents
  • Platinum price - $1,806.00 – down $21.30
  • Palladium price - $747.20 – up $2.10

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Disclaimer:
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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