Mid-Day Gold & Silver Market Report – 09/25/2012

John Foster

9/25/2012 12:11:00 PM

GOLD’S BULLISH SIGNALS; WILL QE3 BE WORTH IT?

Gold continues to hold steady through midday trading. While weaker German business data weakened the euro and pushed up the U.S. dollar, expectations of central bank monetary stimulus and central bank buying appear to be providing bullish signals for Gold. "We still prefer to be buying Gold on dips and believe the break higher will eventually come. But the futures market needs to lose some speculative length and the physical market needs to adjust to a higher price range first," said Walter de Wet, an analyst at Standard Bank. De Wet expects Gold to reach $1,900 in the latter half of the fourth quarter.

Not all members of the U.S. Federal Reserve appear to agree of the benefit or effectiveness of the recently announced new round of quantitative easing. Charles Plosser, President of the Federal Reserve Bank of Philadelphia, is concerned that not only will the new bond-buying program not work, but that it might also call into question the credibility of the U.S. central bank. “We are unlikely to see much benefit to growth or to employment from further asset purchases,” said President Plosser. “Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility.”

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

• Gold, $1765.80, Up $2.20.
• Silver, $33.97, Down $0.02.
• Platinum, $1,631.70, Up $8.70.
• Palladium, $641.20, Down $4.30.

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