Mid-Day Gold & Silver Market Report, 7/11/2012

Brandi Brundidge

7/11/2012 12:03:00 PM

SLOW ECONOMIC GROWTH HELPS GOLD; INVESTORS LOOK FOR MONETARY EASING  

The global economy is slowing, and that is driving a higher demand for Gold. Economic issues have been abundant lately. The situation in Europe has shown no signs of improvement. China’s economy has slowed to a pace not seen in almost three years. The reports in the United States also show a slowdown in key economic areas. “Issues surrounding Europe’s debt crisis and a slowing economy in the U.S. and China will offer support to (Gold) prices,” said Sun Yonggang at Everbright Futures Co.

On the European front, many observers say that Germany holds the key to economic recovery for the entire region. While that might be true, don’t expect the German people to agree to that theory. “Right now, people are making the same mistake and assuming that what is good for Volkswagen and BMW is good for Germany. But that isn’t true, either. The voters have already caught on. Whatever bailout their leaders might agree to at one of the endless ‘save the euro’ summits will simply get thrown out at the ballot box,” said Matthew Lynn, the founder of Strategy Economics.

In the United States, much talk has been about the lack of action taken by the Federal Reserve. With the reports of manufacturing and employment slowing, the conditions could be pointing toward another round of monetary easing by the Fed. “Extending Operation Twist was a less overt move for the Fed to keep interest rates low, but I think economic conditions are moving in a direction that it could become necessary for the Fed to pump money into the system in a more obvious way through QE3,” said Tom Schrader, managing director at Stifel Nicolaus.

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

• Gold, $1,581.30, Up $0.00.
• Silver, $27.27, Up $0.32.
• Platinum, $1,430.10, Up $0.40.
• Palladium, $584.00, Up $6.50.

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