Closing Gold & Silver Market Report – 8/12/2013

PHYSICAL DEMAND CAUSES BACKWARDATION; FED ECONOMISTS SPEAK

Gold is causing some uproar as analysts suggest the yellow metal has gone into backwardation, meaning the current spot price is higher than the future contract price.  Today, the COMEX division of the New York Mercantile Exchange showed December delivery for Gold rose by $22 to $1,334.20 an ounce, while October’s contract reported $1,334.30 an ounce and the spot price was $6.87 higher.  "[This jump in Gold] is the backwardation of the near-buy," RBC Capital Markets Precious Metals strategist George Gero said. "There seems to be demand for the physical."  Typically when backwardation occurs, supply begins to see pressure, which can cause a price increase.  According to Commerzbank AG, the China Gold Association reported the physical Gold demand for the first half of 2013 is 706.3 tons, nearly topping the 2012 amount of 832.2 tons.

The U.S. Federal Reserve’s future plans are unknown but are keeping everyone on their toes to see what may happen if fiscal policy is tapered or ended. The real question is whether or not quantitative easing (QE) has been effective for the U.S. economy.  “Modest boost to economic growth and inflation” is how two Federal Reserve economists described QE2’s performance.  "[E]stimates from a macroeconomic model suggest that such interest rate forward guidance probably has greater effects than signals about the amount of assets purchased," the economists wrote in a paper released by the San Francisco Federal Reserve.

 

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

  • Gold, $1,337.80, Up $23.60.
  • Silver, $21.46, Up $0.97.
  • Platinum, $1,496.60, Down $5.00.
  • Palladium, $739.00, Down $3.50.

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Disclaimer:

APMEX’s ‘News and Commentaries’ provide our readers with a review of spot price activity and some of the factors that may be affecting the market for precious metals, three times during the trading day. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The "News and Commentaries" are not intended as a comprehensive discussion and there may be other factors that may be affecting the financial marketplace. These "News and Commentaries" are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, to purchase or to sell any precious metal product. All orders, all purchases and all sales, if any, are subject to the terms of the User Agreement and other applicable policies.

US Dollar Prices are in USD

Precious Metal Prices
4/17/2014 5:15:48 PM EST

Metal Bid Ask Change
Gold $1,294.60 $1,296.60 ($8.90)
Silver $19.60 $19.70 $0.02
Platinum $1,405.70 $1,415.70 ($22.10)
Palladium $792.10 $797.10 ($6.20)
4/17/2014 5:15:48 PM EST

Click here for Historical Charts*All Charts are in USD


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