Morning Gold & Silver Market Report, 7/5/2012

Ryan Schwimmer

7/5/2012 8:02:00 AM

TRIO OF ECONOMIC MOVES BOOSTS MARKETS  

Major financial policy moves from Europe and China are boosting American stock futures. Precious Metals prices have been choppy in early morning trading thanks to the inflationary pressures these moves are likely to have on the global economy. The first of these moves came from the United Kingdom, when the Bank of England refreshed its quantitative easing program and now plans to pump an additional 50 billion pounds into the English economy. George Buckley of Deutsche Bank AG said, “It’s a good decision, and they need to do it because the recovery is taking so long. This is as much as decision to offset the future downside risks from the euro area as it is to try and support the rather flagging recovery.”

The next move came from China, where the People’s Bank of China cut its main interest rate effective Friday. David Morrison of GFT Global said, “The fact that China is actually cutting lending and deposit rates is a bigger deal than just reducing the reserve requirement. But there’s a great big Chinese data dump next week, so the question is whether this is a heads-up that the data will not be as good as hoped.” China is seen as a key in the global economic recovery.

Finally, the European Central Bank (ECB) also cut interest rates, this time to a record low of less than 1 percent. “This outcome is probably the one that is the most acceptable to the ECB at this stage,” said Jens Sondergaard of Nomura. He added, “I think the big question is, is that a unanimous rate decision, or are there dissenting members that would have preferred no change.” Stock markets are typically boosted when these types of moves are made, because it shows that the government is doing what it can to support the markets. The Gold price typically increases due to its historical stability in times of financial uncertainty, responding to the inflation that these moves cause.

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

• Gold, $1,604.70, Down $18.60.
• Silver, $27.64, Down $0.72.
• Platinum, $1,468.50, Down $21.40.
• Palladium, $589.00, Down $10.90.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.