Mid-Day Gold & Silver Market Report – 1/21/2014
PRECIOUS METALS PRESSURED FROM QE SPECULATION
Precious Metals prices are headed downward through mid-day trading, giving back gains earned at the end of last week. Speculation of continued quantitative easing (QE) tapering, a stronger U.S. dollar and a downbeat price forecast for Gold this year have weighed on Precious Metals. Mike Cullinane, head of Treasuries trading with D.A. Davidson in St. Petersburg, Florida, said, “The view out there is there's going to be continued tapering on a gradual basis. Another $10 billion in tapering is a logical way to go.”
U.S. stock prices are trading up Tuesday as they reopen from the holiday weekend and new numbers are taken into consideration. However, many are skeptical about recent data and believe the economic effects of the Federal Reserve tapering QE could be catastrophic based on its timing. Gold Arrow Capital Management co-founder Gijsbert Groenewegen said, “When we taper, interest rates go up and they will break out of the 32-year downtrend in 10-year Treasury yields which will implode the bond market.” He went on to add that higher interest rates will also implode the equity and housing markets. He said investors could turn to Precious Metals “because they are the true reflection of the fundamentals of the reserve currency and world economy.”
At 1:45 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,244.50, Down $9.90.
- Silver, $19.92, Down $0.43.
- Platinum, $1,454.30, Down $1.80.
- Palladium, $749.00, Up $0.50.
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