Mid-Day Gold & Silver Market Report – 8/23/2011
Precious Metals Retreat as the Stock Market Advances – The morning trading hours see gold, silver, platinum and palladium are all giving back a portion of their recent gains. The most likely scenario is that with the rapid rise of the past two weeks, some investors have decided to lock in gains. A short term correction is not unusual, when prices have moved up as quickly as they have this month. There will be investors waiting on the sideline to purchase on the dips.
The stock market is up triple digits in morning trading, as it resumes its pattern of high volatility. This increase is caused impart by speculation of what Fed Chairman Bernanke will announce after the Fed meeting on Friday. The market rally is on the expectation there will be a QE3. Other news supporting the positive start is that list of “problem banks” has declined for the first time since 2006.
Former Fed Chairman Alan Greenspan said today, “The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system.” Deterioration of the euro could lead to even more slowing of the U.S. economy. On August 7, while appearing on “Meet the Press,” Greenspan commented that the chance of the U.S. experiencing a double-dip depression depended on Europe and not the United States.