Closing Gold & Silver Market Report – 6/24/2013
METAL PRICES MOVE AS U.S. DOLLAR BECOMES MORE ATTRACTIVE
Gold fell lower today as the U.S. dollar strengthened with news that China’s current housing market condition is similar to the infamous 2008 U.S. mortgage bubble. The major factor affecting Precious Metals presently is last week’s announcement from the Federal Reserve that easing measures may be tapered in the near future. Investors translate the message from the Fed as a positive sign that the economy is performing well and that inflation should no longer be a concern. The market believes in safe haven assets such as Gold when inflation becomes a concern. Although the Fed is trying to alleviate that fear by ending their bond buying program, inflation could still be an issue in the future. John Kinsey at Caldwell Securities Ltd. suggests that inflation will continue to be a risk with unprecedented money printing by central banks around the world. Kinsey remains bullish for Gold, saying, “Most of the reasons for Gold as a reserve currency, as a hedge against inflation, are still there. Everybody is stimulating and everybody has debt problems, and if the economies gain some traction, I think you’re going to see inflation come back.”
Minneapolis Federal Reserve Bank President Narayana Kocherlakota made an unexpected statement today in response to last week’s news conference by Fed Chairman Ben Bernanke. Kocherlakota commented on the Fed’s vagueness on what the economy can expect with future monetary policy. “The [Fed’s policy-setting] committee can reduce residual policy uncertainty, and so better achieve its goals, by providing this missing clarity in future communications,” he said. Kocherlakota proposes the Fed hold interest rates close to zero until the jobless rate hits 5.5 to provide the nation with needed stimulus.
At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,283.40, Down $10.60.
- Silver, $19.72, Down $0.36.
- Platinum, $1,335.50, Down $36.00.
- Palladium, $663.00, Down $11.80.
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