Mid-Day Gold & Silver Market Report 5/18/2012
PRECIOUS METALS ON THE RISE; CHINA, GREECE WORRY INVESTORS
Precious Metals prices are on the rise following this morning’s trends. The Gold price in particular is increasing, based on speculation the Federal Reserve may announce further stimulus to give the U.S. economy a healthy boost. Investors are reacting to the assumption by purchasing Gold as a hedge against inflation. Edel Tully at UBS AG in London said, “To see a return of Gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that Gold has indeed turned the corner. Follow through buying will have to kick in to encourage investors to jump in.”
Marc Faber, the editor and publisher of the Gloom, Boom and Doom report, spoke with CNBC regarding China, the second largest economy in the world, experiencing a possible slowdown and how that would affect prices of industrial commodities. Faber said he thinks the unforeseen troubles in China are worse than those in Greece. He said, “I think the biggest risk is actually China because, if you look at Greece, it’s an insignificant economy. Yes, they owe money, but the market knows that it’s bankrupt.”
The eurozone crisis continues and appears it will not be settled anytime soon. Germany has stepped in and assisted the eurozone through its predicament by preventing any type of recession, but it may feel repercussions soon. Jennifer Mckeown at Capital Economics said, “With the situation in Greece edging close to crisis point and demand from outside the eurozone slowing, we expect the IFO measures of current activity and expectations to have fallen this month … a decline this month may well be a sign of things to come.”
At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold: $1,588.60, Up $12.20.
- Silver: $28.70, Up $0.60.
- Platinum: $1,457.40, Up $2.00.
- Palladium: $605.80, Down $2.10.
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