Morning Gold & Silver Market Report – 10/23/2012

Ryan Schwimmer

10/23/2012 8:03:00 AM

HEAD OF BANK OF ISRAEL SEES GLOBAL RECESSION

Precious Metals prices are being dragged down by the euro, even as U.S. stock market indexes are falling. The credit ratings of five Spanish regions were downgraded, hurting the euro’s price. Deutsche Bank analyst Daniel Brebner said, “You’ve had QE priced in and what we’re seeing now is a bit of at retracement following that. We have a pause in monetary policy action … Conditions economically remain tenuous … there are concerns with respect to growth, and therefore the potential for deflation is starting to pick up a little bit.”

Stanley Fischer, the head of the Bank of Israel, believes that the global economy is worsening to a point of recession. “The empirical evidence is that [QE3] is actually quite effective, and we’ll see. This one is aimed very much at the mortgage markets, and housing had already been making a comeback in the United States so this might give it a push,” he said. Regarding the U.S., he added, “They have to deal with the fact that they have an unsustainable deficit and it’s clear from the polls that the uncertainties about fiscal policy are having a major impact on how people think about the future of the economy.”

24/7 Wall St. recently listed the 10 nations that control the world’s Gold. The list took into account each nation’s Gold-to-GDP ratio, and some of the rankings were surprising. The resarchers wrote, “Gold is no longer just an inflation hedge; it is the key protection against a global race to devalue currencies, even if consumer prices are somewhat stable. Bonds pay historically low rates and stock market volatility has spooked many investors, so gold is becoming the true safe haven.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,710.90, Down $15.30.
• Silver, $31.91, Down $0.36.
• Platinum, $1,578.70, Down $31.00.
• Palladium, $600.30, Down $23.40.

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