Morning Gold & Silver Market Report, 6/7/2012

Ryan Schwimmer

6/7/2012 8:06:00 AM

CHINESE RATE CUT BOOSTS STOCKS; FED CHIEF TO TESTIFY

News from China was driving markets this morning, as the central bank in the country cut interest rates by 25 basis points. Jordan Lambert of Spreadex Ltd. said “The unscheduled rate announcement by the Chinese central bank has been long awaited and has satisfied the growing expectations of a rate cut by a major economy. … It is also worth being mindful that sometimes such interest rate moves are coordinated with other central banks. Therefore, there could be further surprises to the upside.”

Also in focus today will be Federal Reserve Chairman Ben Bernanke’s testimony to the Joint Economic Committee. Bernanke always seems to move the markets when he speaks, and today may be no different. Another top Fed official, Janet Yellen, is not closing the door on a third round of quantitative easing. “I am convinced that scope remains for the (Federal Open Market Committee) to provide further policy accommodation,” Yellen said. She said recent jobs numbers have been “pretty disappointing,” and that, among other topics, could be reason for further intervention.

This week’s jobless claims report showed a drop of 12,000 new claims, which is better than expected. However, numbers from two weeks ago were revised upward by 6,000, and continuing claims rose by 34,000. Precious Metals prices and stock prices seemed to take this news in stride, as they continued to be influenced more by the Chinese rate cut.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,623.20, Down $10.50.
• Silver, $29.54, Down $0.04.
• Platinum, $1,467.50, Down $1,467.50.
• Palladium, $628.50, Down $4.30.

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