Mid-Day Gold & Silver Market Report – 1/23/2013
GOLD DEMAND HIGH; GLOBAL GROWTH FORECAST CUT
Gold demand for this time of year is historically low. However, this year has started off with a higher than average demand for the yellow metal. “It was strong in November and that’s normally a usual seasonal pattern that we see coming through from Indian post-monsoon, wedding season buying. The fact that January is as high as we see in November usually, that’s unusual,” Marc Ground, a commodity strategist at Standard Bank in Johannesburg, said. Many experts point to the increased buying from central banks around the world and a change in import taxes on Gold in India as drivers of the higher demand.
The International Monetary Fund has lowered its growth forecast for 2013 based on continuing economic issues in Europe. “The near-term outlook for the euro area has been revised downward, even though progress in national adjustment and a strengthened EU-wide policy response to the euro area crisis reduced tail risks and improved financial conditions for sovereigns in the periphery,” the IMF said in the report. However, the report was not all negative. “If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected,” the IMF said.
In a recent poll, global investors say the United States’ financial issues are the largest risk to the global economy. While the European economic troubles are running a close second in the list of concerns, the political battle in the U.S. capital is by far the leading issue. “Without a so-called ‘grand bargain’ between Democrats and Republicans, the U.S. fiscal situation sets up a series of potential crises,” Howard Wang, a portfolio manager at JF Asset Management Ltd. in Hong Kong, said. “Bad politics could offset a good economy.”
At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,688.70, Down $6.50.
- Silver, $32.39, Up $0.18.
- Platinum, $1,690.90, Down $7.60.
- Palladium, $727.00, Down $3.90.
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