Mid-Day Gold & Silver Market Report – 11/7/2013
ECB RATE CUT PRESSURES U.S. STOCKS, GOLD
Gold has pared earlier losses but remains down slightly today as news that the European Central Bank (ECB) cut its key interest rate, forcing the U.S. dollar higher. “Precious Metals, like all the other markets, came to life when the ECB surprised everyone with a 25 basis-point interest-rate cut,”, GFT Markets technical analyst Fawad Razaqzada said. Gold and other Precious Metals traditionally react unfavorably when the U.S. dollar performs well versus competing world currencies. Investors await tomorrow’s nonfarm payroll numbers as strong third quarter GDP figures increased confidence in the dollar. Historically, lower prices have triggered an increase in physical buying among investors looking to take advantage of price dips.
Along with Gold and Silver, benchmark equities indexes have fallen moderately following the rate cut announcement from the ECB. “The market will be volatile,” Bryn Mawr Trust Co. chief investment officer Ernie Cecilia said. “You had some good economic news today and we’ll see what the payrolls numbers are tomorrow. The fear is that with better-than-expected economic numbers, tapering will commence sooner rather than later.” The nonfarm payroll data has been one of the central economic factors investors have focused on as U.S. employment levels need to reach a certain level before the U.S. Federal Reserve can commit to a reduction in monetary stimulus measures.
At 1:21 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,309.60, Down $10.20.
- Silver, $21.72, Down $0.10
- Platinum, $1,457.40, Down $11.00.
- Palladium, $762.80, Down $2.60.
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