Mid-Day Gold & Silver Market Report, 06/19/2012

Brandi Brundidge

6/19/2012 12:13:00 PM

INVESTORS AWAIT CLUES AS FED MEETING BEGINS  

Gold has retreated from its morning high as investors are awaiting clues as to what measures the Federal Reserve might take after its meeting this week. Weak jobs data from earlier this month fueled speculation that the Fed might extend Operation Twist (the repurchase of bonds) or move to a full round of quantitative easing. “Clearly the shift towards easier money is much more necessary now than it was three months ago. That’s good news for Gold,” said Adrian Day, president of Adrian Day Asset Management. “I don’t think there’s going to be another huge program that people can call QE3, but the (Fed) will probably renew the Twist program,” he said.

American stock markets were on the move ahead of the Federal Open Market Committee meeting, gaining sharply on the possibility of the Fed making moves to stimulate the economy. “The big question is whether the Fed shows enough concern to provide additional stimulus or whether it assesses the current slowdown as a temporary situation that will self correct,” Fred Dickson of Davidson Cos. wrote in emailed comments, as the FOMC on Tuesday began a two-day session.The committee will release its policy statement at the conclusion of its meeting Wednesday.

Europe’s financial crisis and increasing the lending capacity of the International Monetary Fund (IMF) was the focus of the recent Group of 20 (G20) leaders who met in Mexico. The IMF was able to nearly double funds available to $456 billion in an effort to increase confidence in the euro. “There is concern that the firewall available may not be adequate to deal with contagion,” Indian Prime Minister Manmohan Singh said at the summit. “The resources currently expected to be mobilized by Europe and the IMF are less than was estimated a year ago, and the crisis is actually more serious.”

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

• Gold, $1,622.80, Down $4.70.
• Silver, $28.57, Down $0.21.
• Platinum, $1,485.00, Down $1.10.
• Palladium, $631.40, Down $2.80.

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