Closing Gold & Silver Market Report – 8/21/2013
FED MINUTES FAIL TO INSPIRE METALS MOVEMENT
As expected, the release of July’s Federal Reserve policy minutes failed to stimulate Precious Metals prices in any significant way. Since Fed-centric news has dominated financial headlines over the last several months, it may be time to start wondering if the impact of reducing the Fed’s quantitative easing (QE) program is already priced into metals markets. “Gold dipped briefly in reaction to the minutes but quickly rebounded to set new intraday highs,” one market analyst said. Gold has rebounded significantly from lows reached in June but the price is approaching technical resistance levels in the $1,375 to $1,425 range. If the tapering of $85 billion in monthly mortgage-backed and treasury securities commences during the third quarter as many market experts predict, it will be interesting to see how Precious Metals prices react.
U.S. stocks continue their backslide as Fed policy remains supportive of reducing QE levels by year end. Today’s price drop marks the longest decline in the Dow Jones Industrial Average in more than a year. “It will be a seminal moment when (the Federal Reserve moves) from the easing they’ve been in for years toward some incremental tightening steps. The minutes are quite clear in the sense that the Fed doesn’t know that we are there yet where the process can begin,” Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank, said. Though jobs data and the overall domestic economy continues to show modest progress, investors will wait to see if Fed officials deem the improvement strong enough to begin tapering monetary stimulus.
At 5:05 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,367.50, Down $7.10.
- Silver, $22.94, Down $0.22.
- Platinum, $1,517.90, Down $8.60.
- Palladium, $745.00, Down $6.20.
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