Mid-Day Gold & Silver Market Report, 8/1/2012

Brandi Brundidge

8/1/2012 12:07:00 PM

GOLD MARKET HOVERS AS ECONOMIC DECISIONS LOOM  

Precious Metals markets have stayed relatively flat since Monday. However, it just may be the calm before the storm. Starting today and going into tomorrow, announcements are expected from the United States Federal Reserve and the European Central Bank. These announcements are expected to lay out upcoming plans to improve struggling economies. While most observers think there will be no major actions such as monetary easing, they do think any comments will affect markets. “People are on the sidelines, waiting for the Fed,” said a Hong Kong based dealer, who added that trading volumes across markets were low.

Many experts believe the time is now for the European Central Bank to act on promises made to help the struggling region. United States Treasury Secretary Timothy Geithner said Europe must work on reform including “bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need.” Not all in Europe agree with that outlook. “If you take away the interest rate pressure on individual states, you also take away the pressure on them to reform,” said German Vice Chancellor Philipp Roesler, who is also the economy minister.

The United States Federal Reserve is scheduled to release a statement this afternoon about the financial outlook and the plans to improve it. In most opinions, the outlook for the future will be downgraded. However, it does not ensure any more monetary easing by the Fed. It is expected to be more of a “stay the course” report. “We do not expect any new initiative from the Fed,” said Eric Green, economist at TD Securities. “A dovish statement signaling willingness to do more will manage frustrated expectations for more (monetary easing).”

At 1:03 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,605.20, Down $7.00.
• Silver, $27.47, Down $0.55.
• Platinum, $1,401.70, Down $15.20.
• Palladium, $583.80, Down $7.80.

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