Mid-Day Gold & Silver Market Report – 5/7/2012

Brandi Brundidge

5/7/2012 12:03:00 PM

GOLD TAX REMOVED IN INDIA; FED STILL OPEN TO EASING   

With the Gold price slightly down, that Precious Metal is in need of a pick-me-up. One of the leading Gold importing nations has done just that. In March, retailers in India went on strike as the government added new taxes on them. Today, that tax has been removed. “Gold demand will likely improve. It’s a good decision,” said Prithviraj Kothari, president of the Bombay Bullion Association.

China’s economic outlook has improved over the past two months. Inflation and the loss of credit supply have been the main factors in that country’s woes. With the lower oil prices, manufacturing costs are down, and production is up -- even with a slower demand. Another factor is that China’s retail sales continue on pace. “We think April data would show that economic activity is rebounding modestly,” UBS analysts said.

With the stock market slipping and the weak economic growth in the United States, the Federal Reserve will not take off the table the idea of another round of monetary easing. The economy added about 115,000 jobs in April, and that number was below expectations. “In line with expectations was a lame mediocre number. Middle-of-the-road is not good enough in terms of the economy, and that’s why the market is down,” said Peter Boockvar, market strategist with Miller Tabak.

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1641.00 - Down $5.20.
• Silver - $30.19 - Down $0.26.
• Platinum - $1531.70 - Down $5.30.
• Palladium – $648.60 - Down $4.50.

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