Mid-Day Gold & Silver Market Report, 07/03/2012

Brandi Brundidge

7/3/2012 12:03:00 PM

GOLD HOLDS MORNING GAINS; IRAN SCARING UP OIL FUTURES  

Precious Metals continued to hold onto morning session gains ahead of the July Fourth holiday. American manufacturing’s first drop in nearly three years is yet one more data point leading many to believe central bank easing may be on its way. “You can take it as a sign that chances of QE (quantitative easing) are improving,” said Dominic Schnider, an analyst at UBS Wealth Management. “We are unlikely to see a big add-on after Operation Twist was extended, unless things fell off the cliff. And remember, when things did fall off the cliff in 2008, Gold fell as well.”

While manufacturing output may have dropped in June, new factory orders in May have led to a boost in American stocks today. While many economists were looking for an increase of 0.01 percent in factory orders, the actual number came in at 0.7 percent, according to the Commerce Department. “The May reading for factory goods orders provided a pleasant contrast to a dire picture for the health of manufacturing in the ISM (Institute for Supply Management) report,” wrote Andrew Wilkinson at Miller Tabak & Co.

Prices for crude oil futures have peaked at a six week high, pushed primarily by news out of Iran as well as the jump in American factory orders. Iran staged missile drills late Monday and is considering legislation that would close the Strait of Hormuz. Citi Futures Perspective analyst Tim Evans said the Iranian rhetoric was “likely just bluster, but it is the kind of noise that has sparked price rallies in the past.”

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

• Gold, $1,624.70, Up $25.50.
• Silver, $28.40, Up $0.83.
• Platinum, $1,489.30, Up $32.50.
• Palladium, $600.00, Up $21.00.

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