Mid-Day Gold &Silver Market Report, 8/31/2012

Ted Prince

8/31/2012 12:00:00 PM

FED CHAIRMAN GIVES CLEAR SIGNAL FOR QE3  

The much anticipated Jackson Hole, Wyo., speech took place this morning, with Federal Reserve Chairman Ben Bernanke giving indications that the Fed will soon embark on another round of bond buying, otherwise known as quantitative easing (QE). “It is important to achieve further progress, particularly in the labor market,” Bernanke said. “Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” Bernanke cited previous rounds of easing as effective in stimulating economic development and job creation without hastening inflation.

The Gold price has had a turbulent morning. The metal fell immediately after Bernanke’s speech but quickly rebounded, leaving Gold at its highest level since April. “The main catalyst for the reversal in Gold has been that Bernanke used the words “grave concern” and the interpretation is that there’s going to be more QE if he’s using such dire projection for the economy,” said Jeffrey Sica, chief investment officer of SICA Wealth Management. Today’s rise in Gold price could be the first substantial gain in a rally that some analysts predict to breach $1,900 by year’s end.

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

• Gold, 1,681.20, Up $25.60.
• Silver, $31.23, Up $0.88.
• Platinum, $1,535.30, Up $30.60.
• Palladium, $627.90, Up $11.40.

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