Closing Gold & Silver Market Report – 9/28/2012

Ryan Schwimmer

9/28/2012 4:00:00 PM

SPANISH BANKS PASS STRESS TEST; QE3 TO PUSH GOLD TO NEW HIGHS

Gold and Silver prices turned lower in afternoon trading after stress tests on banks in Spain. Many traders are waiting to see if credit rating agency Moody’s Investors Service downgrades Spain’s sovereign debt rating. Gold has largely followed the euro recently, and David Song of DailyFX said that the euro’s appeal is weakening amid Spain’s issues. “The ongoing turmoil in the periphery countries will continue to dampen the appeal of the single currency as the debt crisis drags on the real economy.”

Some have wondered why Gold’s price hasn’t hit new highs already after the unprecedented open ended QE3 was announced. Credit Agricole analyst Robin Bhar said, “With this open ended commitment from the Fed to do whatever is necessary (for the U.S. economy), we will see new highs, but it may take longer than the market through to get there. The Gold price has really motored when everything has been aligned, and generally that has been when physical buying has been strong. That's been notably absent in the last quarter. It's all very well making physical purchases when the price is attractive, less so when the price is close to record highs.” With recent news of more central banks buying Gold, the physical demand could be resurfacing.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,773.50, Down $6.00.
• Silver, $34.54, Down $0.13.
• Platinum, $1,663.40, Up $15.30.
• Palladium, $638.50, Up $2.10.

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