Mid-Day Gold & Silver Market Report, 06/15/2012

Brandi Brundidge

6/15/2012 12:47:00 PM

GOLD STEADY AS CONSUMER SENTIMENT DROPS  

Gold prices are continuing to hold steady through midday trading today on expectations that central banks will hold to their pledges to take action as the Greek election nears. “Any chance of monetary easing is in the medium term positive (for Gold),” Credit Suisse analyst Tobias Merath said. “We think the cyclical environment is not so bad, but we’ve seen a lot of profit taking in the last two months. Every time people expect more deleveraging of banks, less lending, (they) sell assets (like Gold) to generate cash.”

June has seen the lowest level of confidence among American consumers this year. One consumer sentiment index fell to 74.1 from 79.3, a drop greater than most economists expected. While gasoline prices may have come down, job growth is slowing, and inflation appears to be rising faster than wage gains. “I’m not so sure how much the average American is in tune with what is exactly occurring in Europe,” Russell Price, senior economist at Ameriprise Financial Inc., said before today’s report. “But it is at the front of their minds, because they’re seeing stock values decline, and they’re seeing job growth decline, and that’s worrisome.”

European stocks hit June highs after the Bank of England announced credit easing measures, adding its name to the list of central banks believed to be standing ready to stimulate the global economy if needed. There is still concern ahead of this weekend’s Greek elections that “the Greek elections won’t add more clarity for the markets, but a clear positive is that investors increasingly believe that central banks are ready to act after the elections -- whatever the outcome may be,” said Lars Knudsen at LGT Capital Management in Switzerland. “Markets see a decreasing likelihood of contagion to the eurozone.”

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

• Gold, $1,627.40, Up $7.80.
• Silver, $28.73, Up $0.22.
• Platinum, $1,487.80, Down $1.80.
• Palladium, $632.00, Down $3.90.

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