Mid-Day Gold & Silver Market Report 4/11/2012

Brandi Brundidge

4/11/2012 12:05:00 PM

2013 GOLD OUTLOOK POSITIVE; INVESTORS STEER AWAY FROM SPAIN  

The outlook for Gold remains positive for 2013, even though 2012 already has been difficult for the metal due to various debt crises in Europe and the indefinite U.S. financial and economic recovery. GFMS Chairman Philip Klapwijk said, “We are expecting still that we are going to see a push above $2,000 in 2013, but it may be that 2013 marks the high-water mark for the market. It depends (on whether) we see some resolution in Europe, enough to really take some of the sting out of that issue, … an end to stimulus measures in the United States … and the prospect of a normalization of monetary policy.”

Investors fear for the worst with the possibility of a third round of quantitative easing by the Federal Reserve to pump more money into the U.S. financial system. But Atlanta Federal Reserve President Dennis Lockhart said he feels differently. “The U.S. economy remains fragile, but things would have to get a lot worse for the Federal Reserve to launch another round of monetary stimulus,” he said.

Spain’s banks are experiencing a loss of interest from investors who think the country is heading straight for a recession. Spain will not be able to receive state aid, as the government has ruled it out. At this point, Spain has two options: increasing private capital, or asking for a bailout from the European Union. Santander Chief Executive Alfredo Sáenz said, “Above all, what we need is a more stable economic and financial market environment in the eurozone area that would allow the institutions a better access to the wholesale markets. The cheap financing provided by the ECB’s (European Central Bank’s) three-year liquidity funds has been a positive step. It’s a beginning, but that is clearly not enough.”

At 12:05 p.m. (CDT), the APMEX precious metals spot prices were:

• Gold - $1,659.70 – Down $1.50.
• Silver - $31.58 – Down $0.16.
• Platinum - $1,583.20 – Down $9.50.
• Palladium - $636.60 – Down $1.20.

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