Mid-Day Gold & Silver Market Report, 07/05/2012

Brandi Brundidge

7/5/2012 12:08:00 PM

GOLD DIPS ON RATE CUTS; EUROPE A DRAG ON RECOVERY?  

Precious Metals were still trading lower on the heels of the European Central Bank’s cutting its prime interest rate to a record low. While Gold had made some headway after China’s surprise rate cut, the move by the ECB has pushed the euro down to a one month low against the dollar. “Overall, rate cuts by China, the ECB, and the U.S. are all positive for Gold, on a slightly longer view than just one day for the simple reason that with inflation where it is, you start cutting interest rates of course, then real interest rates get lower. So, we see it as a bullish development for Gold, and most of the other Precious Metals should be benefit from that,” said Walter de Wet, analyst at Standard Bank.

Growth in service industries, which makes up the largest part of the American economy, grew at its slowest pace since 2010. Limited hiring and low income growth have made many families unwilling to make purchases or delay them. “Business activity in the services, construction and government sectors of the economy decelerated in June but is still growing at a modest pace,” said Steven Wood, principal economist at Insight Economics LLC. “A cyclical economic expansion is currently in place, but it has softened in the past three months.”

American stocks are also giving up gains today, retreating from a three day rally as concerns continue about the European crisis, its effect on the United States economy, and what Friday’s nonfarm payroll report might show. As the debt crisis in Europe continues, concerns grow over its drag on the American economy and recovery. “The genesis of the economic decline we’re seeing is Europe. It is spilling everywhere,” said Stephen Massocca, managing director at Wedbush Morgan. “The market’s main focus continues unchanged, and that is going to be the European debt crisis. I still think that is going to be the big news story that will have the greatest impact on stock movements.”

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

• Gold, $1,608.40, Down $14.90.
• Silver, $27.77, Down $0.59.
• Platinum, $1,474.60, Down $15.30.
• Palladium, $586.40, Down $13.60.

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.