Mid-Day Gold & Silver Market Report – 3/13/2012

Timothy Oakes

3/13/2012 12:04:00 PM

PLATINUM OVERTAKES GOLD; STRONGER DOLLAR ANTICIPATED  

Platinum appears to be leading the midday charge, as its price climbed above the Gold price for the first time in six months. Platinum’s price increase has been propelled by supply and production issues in South Africa. Nic Brown at Natixis said, “We have been ragingly bullish on Platinum this year. We perhaps got in a tiny bit too early, but this is one we have been plugging very strongly.” Brown said, “We think the fundamentals of Platinum are much better than Gold’s fundamentals.” He said industrial demand for Platinum from the European auto market was likely to be lackluster, but jewelry demand in other consuming nations such as Japan and China could offset that. The Federal Reserve meeting today is expected to provide more clarity in the outlook for Gold. In a separate interview, Brown said, “The FOMC (Federal Open Market Committee) will be important, after the market interpreted Bernanke’s recent silence on QE3 as an indication that it was unlikely to happen. … The Gold market will be hanging on his every word tonight.”

The dollar continues to strengthen against the euro and other currencies as investors wait for what is expected to be a more upbeat statement from today’s Federal Reserve meeting. A new report showed U.S. retail sales were up in February, giving additional reason for the Fed to back away from quantitative easing. “If the statement from the FOMC acknowledges the recent strength in the U.S. economy, it would suggest that Fed officials are less likely to consider any additional accommodative policy moves and as such could push the dollar higher across the board,” said Boris Schlossberg at GFT. A rising dollar historically indicates a drop in Gold prices, which generally sparks increased consumer demand.

Opposition activists claim a government crackdown is responsible for Syrian forces killing dozens of people near a mosque in the city of Idlib. Rebel forces also are reported to have killed at least 10 troops in an ambush in the same area. Fighting also has been reported in the eastern city of Deir al-Zor and Homs, as the uprising against Syrian President Bashar al-Assad’s rule looks increasingly like a full-blown civil war. Speaking after meeting opponents of Assad in Turkey, U.N.-Arab League envoy Kofi Annan said he was expecting to hear later Tuesday a response from Syria to “concrete proposals” he had made to end the escalating violence.

At 12:01 p.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,696.70 – Down $4.10.
• Silver - $33.65 – Up $0.21.
• Platinum - $1,700.70 – Up $4.00.
• Palladium - $709.90 – Up $5.70.