Closing Gold & Silver Market Report – 11/22/2011
GOLD & SILVER PRICES RISE IN RESPONSE TO GDP NEWS; EUROZONE FUNDING DEMANDS HIT TWO-YEAR HIGH
Since the Mid-Day Gold & Silver Market Report, gold and silver prices have dropped slightly, but have experienced a strong day overall with gold again topping $1,700. The price of platinum has remained stable, while the price for palladium has increased since noon.
Gold and silver prices are up, while stocks in the U.S. have fallen in response to the news this morning from the Commerce Department that the gross domestic product (GDP) grew at a less-than-projected rate of 2% from July to September. With the S&P 500 hitting its most prolonged slump in nearly four months, the speculation is that the Federal Reserve will provide another round of stimulus in response to this country’s sluggish economic growth. In a message to clients, Peter Boockvar, an equity strategist at Miller Tabak & Co., had this to say regarding the possibility of more quantitative easing: “The bottom line with the Fed at this point is when they embark on QE3, as the top people there seem to want it. Whether they couch it in future economic conditions or not, the result is still the same: printing money that they think will create a better environment for economic growth that they haven’t been able to achieve.”
Today saw a two-year high in demand by banks in the eurozone for funding from central banks in the region, with 178 banks asking for 247 billion euros, according to the European Central Bank (ECB). Debt contagion fears in the eurozone have brought traditional lending markets to a near standstill, leaving the ECB as the only source of funding in many cases. Meanwhile, U.S. funds have been cutting back on their lending to banks in the eurozone, with U.S. money market funds in particular reducing their exposure to banks in Europe by 9% in October. Money market funds are usually key providers of bank liquidity, and this reduction in exposure follows an earlier pullback by those funds in May of this year.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
· Gold - $1,702.00 - Up $21.40.
· Silver - $32.76 - Up $1.60.
· Platinum - $1,570.00 - Up $26.20.
· Palladium - $605.10 - Up $17.30.