Mid-Day Gold & Silver Market Report – 2/21/2013
POOR ECONOMIC DATA HALTS GOLD, SILVER AS QE REMAINS HOT TOPIC
Gold and Silver prices are flat today as feeble manufacturing data and unexpectedly high unemployment claims curbed the momentum of recent price dips. “Those who had thought that it’s all rosy cozy for U.S. economy will now move into sidelines,” Chintan Karnani, an independent bullion analyst based in New Delhi, said. Jobless claims rose from 341,000 to 362,000 for the week ending February 16. The news of increased unemployment may serve as a cautionary reminder that economic improvement is not yet a definitive notion as many Federal Reserve committee members seek an end to quantitative easing (QE). “The job market is gradually improving but not fast enough for the Fed to remove accommodation. We still think a Fed rate hike is a late 2014 to early 2015 event,” Jacob Oubina, a senior economist at RBC Capital Markets in New York, said. A continuation of the Fed’s asset-buying strategy has caused fears of further currency devaluation which is expected to positively impact Gold and Silver in the long-term.
Stocks have softened again today following the largest single-session drop since November 2012. The $85 billion in monthly bond purchases are not only bullish for Gold, but have been a major rallying factor for U.S. equities markets. The speculation over QE coming to an end has cooled equities indexes that had been red-hot over the past couple of months. “The timeliness of the Fed’s comments coming out took a little bit of the excess out of the stock market,” Tim Hartzell, chief investment officer at Sequent Asset Management, said. “Equities really had gotten ahead of itself with just the belief that there’s always going to be $85 billion come into the market from the Fed.” The recent recoil was expected by many analysts who see the retreat as a healthy, natural reaction to an over-inflated market. Others experts continue to gauge traditional markets as far too volatile and see Precious Metals as a more sturdy alternative to drastic price fluctuations found in more risky assets.
At 1 p.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,580.00, Up $.50.
- Silver, $28.79, Up $0.10.
- Platinum, $1,623.90, Down $24.20.
- Palladium, $734.80, Down $2.60.
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