Closing Gold & Silver Market Report – 9/8/2011
OBAMA’S SPEECH HYPE “OVERDONE”
Precious metals have traded higher today off of the mid-day spot prices. U.S. stocks declined and gold traded higher after Bernanke said in his speech this afternoon that the central bank would discuss aid options when they meet this month. The next speech that investors are waiting for is President Obama’s to Congress later today regarding the jobs crisis. However, Marc Pado, U.S. Market Strategist at Cantor Fitzgerald, feels that “Obama is not expected to bring a bold new plan to Congress, so the buildup to his speech may be [overdone].”
European Central Bank President Jean-Claude Trichet announced that bank officials had cut growth expectations for the eurozone, fueling rumors that central banks will not be raising interest rates any time soon. Analysts at Commerzbank wrote in a research note, “Besides the persistent debt problems in euro-zone countries and the threat of the U.S. economy sliding into recession, interest rates are set to remain at a very low level for an extended period…In our opinion, the price of gold should therefore remain well supported and it is only a matter of time before new record highs are reached.”
Fitch Ratings announced today that there they may be a credit rating downgrade for China within the next two years as well as an even greater chance for a downgrade of Japan’s rating. Moody’s and S&P have already cut their credit ratings on Japan earlier this year. Andrew Colquhoun, Head of Asia-Pacific Sovereign Ratings at Fitch, says, “We expect a material deterioration in bank asset quality…If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downward…To shore ratings up at their current level we need to see a credible fiscal consolidation plan.”
At 4:00 pm (CT) the APMEX precious metals spot prices were:
- Gold - $1,874.20 – Up $54.60.
- Silver - $42.43 – Up $0.73.
- Platinum - $1,862.90 – Up $33.20.
- Palladium - $758.50– Up $5.80.