Closing Gold & Silver Market Report – 3/23/2012
GOLD RISES ON DOLLAR’S DROP; IRAN USING GOLD TO GET AROUND SANCTIONS
Precious metals prices have been on the rise today and are set to close higher, curbing the three-week overall decline. The climb today was relative to sharp movements in markets. Oil prices rose, and the dollar’s value dropped. The poor showing in home sales data has rekindled hopes the Fed will offer more easing. Head of commodity research Nic Brown of Natixis in London said, “We think that quantitative easing and abnormally low U.S. interest rates have been a huge support for Gold prices. It’s no surprise that the falling Gold price recently has been accompanied by quite a significant rise in U.S. interest rates/ … Gold doesn’t have a yield or a dividend or anything like that, so as interest rates rise, your opportunity cost of holding Gold increases.”
Middle East tensions have begun to wane, but there are details coming to light over how desperate the Iranian government has become to fulfill its need for necessities. Iran has been using pretty much any means necessary to acquire food, primarily wheat, with a half-million metric tons of food arriving via alternative bank sources. Iran is paying a premium to acquire wheat. An unidentified trade source said, “Apart from Turkish banks, Iran is also facilitating deals via Switzerland and is also using cash in smaller trades as well as even Gold. … They are working around the restrictions.”
The overall global and domestic outlook has created a sense of shaky confidence. There are a number of key factors in play this week that really did not get the type of resolution a lot of investors were seeking in the marketplace. Chief investment officer Nick Sargen of Fort Washington Investment Advisors in Cincinnati, said, “There’s a little bit of nervousness this week. … This was the week where the market had a little bit of second-guessing on how strong is Europe, how strong is China, and that raises the question, ‘How confident are we that the economy is going to continue to grow at the pace we’ve seen in recent months?”
At 4:15 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,662.60 – Up $18.60.
- Silver - $32.25 – Up $0.86.
- Platinum - $1,627.50 – Up $14.40.
- Palladium - $661.00 – Up $9.00.
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